A man established and funded an irrevocable trust and named a bank as trustee. All income from the trust is to be paid to his four grandchildren. Which of the following powers retained by the grantor of the trust will cause all or a portion of the trust assets to be includible in his gross estate for federal estate tax purposes?
l. The power to add principal to the trust
ll. The power to vary the amounts of trust income paid to each grandchild
All the following statements concerning the generation-skipping transfer tax (GSTT) are correct EXCEPT:
Which of the following statements concerning the generation-skipping transfer tax (GSTT) is (are) correct?
1. An annual exclusion against GSTT will shelter gifts by a grandparent to a trust benefiting multiple grandchildren.
2. Tuition payments made directly by a grandparent to a university for a grandchild's education are exempt from GSTT.
Which of the following is an example of a taxable gift for federal gift tax purposes?
A father and son have been farming land owned by the father for the past 12 years. Just prior to his death, the father was offered $900,000 for his farm because of its possible use as a shopping center. The son would like to continue to farm the land if it can be included in his father's estate at its current use value. Additional facts are:
1 Average annual gross rentals from nearby farms of similar acreage are $36,000.
2.Average annual state and local real estate taxes on the farm are $4,000.
3.The interest rate for loans from the Federal Land Bank is 8 percent. For federal estate tax purposes, the farm method valuation formula would result in a current use value for the farm of
