American College HS330 Exam - Topic 1 Question 90 Discussion

Actual exam question for American College's HS330 exam

Question #: 90
Topic #: 1

Mr. Allen died early this year survived by his spouse Mrs. Allen. Among the items of family property are:

1. A $300,000 life insurance policy on Mr. Allen's life with Mrs. Allen designated as beneficiary. Mrs. Allen has been the owner of the policy ever since it was issued 4 years ago.

2. The family residence with a fair market value of $400,000. Mr. and Mrs. Allen own the residence jointly with the right of survivorship even though Mr. Allen purchased it with his separate funds.

3. A$40,000 bank account. Mr. and Mrs. Allen own the account jointly with the right of survivorship even though Mrs. Allen made all the deposits. What amount of the family property will be included in Mr. Allen's gross estate for federal estate tax purposes?

A$220,000

B$400,000

C$500,000

D$520,000

Show Suggested Answer

Suggested Answer: D

by Kimbery at Jun 18, 2024, 07:42 AM

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Shawnda

6 months ago

Totally agree, it adds up to $500,000!

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Leonard

6 months ago

Wait, are you sure about the bank account?

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Evangelina

6 months ago

I think the total is $500,000, right?

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Vallie

7 months ago

Jointly owned property means it’s included in the estate.

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Justine

7 months ago

Life insurance goes to the beneficiary, so that's $300,000.

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Eladia

7 months ago

I’m really unsure about the total. If the house is $400,000 and the bank account is $40,000, does that mean we add those together for the estate?

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Fausto

7 months ago

I practiced a similar question where we had to determine the value of joint accounts. I think the full amount of the bank account might be included since Mrs. Allen made all the deposits.

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Geraldo

7 months ago

I think the joint ownership of the house means it might be included, but I’m not sure how much. Is it half or the whole value?

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Jesusita

8 months ago

I remember that life insurance policies go directly to the beneficiary and aren't included in the gross estate, so that's $0 for the policy.

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Lorrine

8 months ago

Hmm, I'm not sure about this one. There are a lot of details to consider, and I want to make sure I'm applying the estate tax rules properly. I'll need to think it through carefully and double-check my work before selecting an answer.

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Jestine

8 months ago

I'm a bit confused on how the jointly owned property is treated for estate tax purposes. I'll need to review the rules around joint tenancy with right of survivorship to make sure I understand it correctly before answering.

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Aileen

8 months ago

Okay, let's think this through step-by-step. The life insurance policy on Mr. Allen's life with Mrs. Allen as the beneficiary is not part of the gross estate since she was the owner. The jointly owned residence and bank account, however, will likely be included since they have the right of survivorship.

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Aleshia

8 months ago

Hmm, this seems like a tricky estate tax question. I'll need to carefully review the details about the life insurance policy, the jointly owned residence, and the joint bank account to determine what gets included in the gross estate.

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Erick

8 months ago

This seems straightforward to me. The life insurance policy is not part of the gross estate, but the jointly owned residence and bank account will be included, so the total amount is $520,000. I'm pretty confident that's the right answer.

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Ashlyn

8 months ago

Hmm, I'm a bit unsure about the steps here. I'll need to review the instructions carefully and make sure I don't miss anything.

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Una

8 months ago

This is a good question to test our knowledge of cabling security. I'll use the process of elimination to narrow down the options and select the best answer.

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Vanesa

1 year ago

Okay, let's see... The life insurance policy is definitely included, and the family residence is too, even though it was purchased with Mr. Allen's separate funds. I think I've got it - the answer is D. $360,000.

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Jame

11 months ago

Yes, the bank account is also included because it is owned jointly with the right of survivorship.

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Amie

11 months ago

But what about the bank account? Is that included as well?

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Kathrine

11 months ago

I think you're right, the life insurance policy and the family residence are both included in Mr. Allen's gross estate.

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Emilio

1 year ago

Ah, the joys of estate planning. I'm just glad I don't have to deal with this stuff in my day-to-day life. Leave it to the professionals, I say!

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Lindsey

11 months ago

C) $350,000

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Cora

11 months ago

B) $300,000

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Santos

12 months ago

A) $160,000

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Maryann

1 year ago

This question is making my head spin! I bet the IRS wishes they could just tax the whole $700,000 and call it a day. Where's the fun in that, though?

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Arlen

11 months ago

D) $360,000

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Marjory

12 months ago

C) $350,000

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Daniel

12 months ago

B) $300,000

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Merri

1 year ago

C) $350,000

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Felix

1 year ago

B) $300,000

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Cristen

1 year ago

A) $160,000

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Helene

1 year ago

A) $160,000

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Dick

1 year ago

Hmm, I'm not sure about this one. It seems like there are a lot of factors to consider. I better double-check my work on this one.

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Dannette

1 year ago

I think the answer is D. $360,000. The life insurance policy and the family residence are both included in the gross estate, but the joint bank account is excluded since Mrs. Allen made all the deposits.

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Paul

1 year ago

User2

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Cassandra

1 year ago

User1

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Rene

1 year ago

I'm not sure, but I think the life insurance policy and the bank account should be included in Mr. Allen's gross estate, so the answer might be D) $360,000.

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Isidra

1 year ago

I disagree, I believe the correct answer is D) $360,000.

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Ludivina

1 year ago

I think the answer is C) $350,000.

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