Practice Test GeeksCIM - Chartered Investment Manager Practice Test
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Estate Planning Flashcards

7 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Estate Planning flashcards as text

  1. A U.S. citizen dies leaving his estate to his spouse, who is not a U.S. citizen. How can the estate still obtain a marital deduction?

    Answer: By transferring the assets to a qualified domestic trust (QDOT)

    The unlimited marital deduction is generally unavailable for non-citizen spouses unless property passes to a QDOT.

  2. What must happen for a surviving spouse to use the deceased spouse's unused exclusion (DSUE) amount?

    Answer: The deceased spouse's executor must elect portability on a timely filed Form 706

    Portability is not automatic; the executor must file an estate tax return and make the election even if no tax is due.

  3. A client bought stock for $20,000 that is worth $200,000 at his death. What is the heir's cost basis under IRC Section 1014?

    Answer: $200,000

    Inherited assets generally receive a basis equal to fair market value at the date of death, eliminating the built-in gain.

  4. A donor gifts stock with a basis of $50,000 and fair market value of $30,000. The donee later sells it for $40,000. What is the donee's recognized gain or loss?

    Answer: No gain or loss

    Under the dual-basis rule, the gain basis is $50,000 and the loss basis is $30,000; a sale between them produces no gain or loss.

  5. For generation-skipping transfer (GST) tax purposes, which of the following is a 'skip person'?

    Answer: The transferor's grandchild whose parent (the transferor's child) is alive

    A grandchild is a skip person unless the predeceased parent exception applies, which moves the grandchild up a generation.

  6. What is the effect of gift splitting between married spouses?

    Answer: A gift by one spouse is treated as made one-half by each spouse, doubling the available annual exclusion

    Gift splitting lets spouses treat a gift by one as made equally by both, using both annual exclusions, and requires filing Form 709.

  7. A grandmother wants to pay her grandson's college tuition without using any annual exclusion or lifetime exemption. What must she do?

    Answer: Pay the tuition directly to the educational institution

    Under IRC Section 2503(e), tuition paid directly to a qualifying educational institution is excluded from gift tax without limit.