AFIP AFIP Taxation and Estate Planning in F&I 2

Question 1

What is the federal estate tax exemption threshold (as of recent law) that determines whether an estate owes federal estate tax?

Accepted Answer

Approximately $12–13 million per individual (indexed for inflation)

Answer

$1 million

Answer

$5.49 million

Answer

$500,000

Question 2

In F&I, why is it important to understand a customer's estate planning status when selling life insurance products?

Accepted Answer

To ensure the beneficiary designations align with the customer's estate plan and avoid probate complications

Answer

To determine the customer's credit tier for loan approval

Answer

To calculate the sales tax on the insurance premium

Answer

To determine whether the vehicle qualifies for a luxury tax exemption

Question 3

Which type of IRS form is issued to report interest income paid to a lender that exceeds $600 in a tax year?

Accepted Answer

Form 1098

Answer

Form 1099-INT

Answer

Form W-2

Answer

Form 1099-MISC

Question 4

A 'transfer on death' (TOD) vehicle title designation allows:

Accepted Answer

The vehicle title to pass directly to a named beneficiary at death without probate

Answer

The vehicle to be sold at auction upon the owner's death to pay estate taxes

Answer

The lender to repossess the vehicle immediately upon the borrower's death

Answer

Co-owners to transfer their share to each other during their lifetimes

Question 5

For a business that purchases a vehicle for commercial use, Section 179 of the IRS tax code allows:

Accepted Answer

An immediate expensing deduction for the cost of qualifying business property in the year of purchase

Answer

A deduction for sales tax paid on the vehicle purchase

Answer

A credit against payroll taxes for vehicle maintenance costs

Answer

A refund of use tax for cross-state commercial travel

Question 6

What is 'gift tax' in the context of transferring a vehicle to a family member?

Accepted Answer

A federal tax on transfers of property by gift that exceed the annual exclusion amount

Answer

A state DMV fee charged for title transfers between family members

Answer

A dealer fee waived when selling to immediate family

Answer

A penalty for underreporting the vehicle's value on the title transfer