What is the objective of the process of abatement? To give legal structure to the reductions that must be made if an estate has insufficient assets to satisfy all legacies. To ensure that all property distributions take place in a timely manner. To provide adequate compensation for the estate executor and any appraisers or other experts that must be hired. To ensure that all legacies are distributed to the appropriate party as specified by the decedent’s will or state laws.

What is the objective of the process of abatement? To give legal structure to the reductions that must be made if an estate has insufficient assets to satisfy all legacies. To ensure that all property distributions take place in a timely manner. To provide adequate compensation for the estate executor and any appraisers or other experts that must be hired. To ensure that all legacies are distributed to the appropriate party as specified by the decedent’s will or state laws.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 4CPA

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What is the objective of the process of abatement? Choose the correct.a. To give legal structure to the reductions that must be made if an estate has insufficient assets to satisfy all legacies.b. To ensure that all property distributions take place in a timely manner.c. To provide adequate compensation for the estate executor and any appraisers or other experts that must be hired.d. To ensure that all legacies are distributed to the appropriate party as specified by the decedent’s will or state laws.
Which of the following is not a goal of probate laws? To gather and preserve all of the decedent’s property. To ensure that each individual produces a valid will. To discover the decedent’s intent for property held at death and then to follow those wishes. To carry out an orderly and fair settlement of all debts and distribution of property.
What is the process of abatement? Select one: a.The establishment of how the creditors will be paid. b.Payment of the claims of creditors. c.An attempt to determine the deceased's intentions when the terms of the will are unclear. d.Selling of assets included in an estate to be able to pay creditors. e.A reduction of various bequests when the estate is not adequate to satisfy them completely.
Why are claims against an estate put into an order of priority? To help the executor determine the due date for each claim. To determine which claims are to be paid if funds are insufficient to pay all claims. To assist in determining which specific assets are to be used to satisfy these claims. To list the claims in order of age so that the oldest can be paid first.
Which of the following are characteristics of the probate process? It provides for distribution of property to the ultimate beneficiary in a quick and timely manner. It provides an orderly procedure for the filing and payment of claims. It provides for systematic administration of the decedent's probate estate. It provides for administration of the decedent's estate with the details only available to the public on a strictly need to know basis. A) I and II B) III and IV C) I and IV D) II and III
In which of the following circumstances would the property be deemed to have been disposed of? a. Property sold to a third party. b. Property gifted to another person or charity. c. Property expropriated by a government agency. d. Property redeemed by the issuer, such as bonds or shares.
In an agreement involving the right to acquire property, which of the following are conditions that must be met in order for the IRS to accept the purchase price set in the agreement as a valid measurement of the value of the property being acquired? The purchase price must be determined by an independent appraisal submitted with an informational gift tax return regardless of the value of the property. The agreement must be a bona fide business arrangement. The agreement cannot be an attempt to transfer the property to a family member for less than full and adequate consideration. The terms of the agreement must be comparable to those that would be entered into by persons in an arm's-length transaction A) I and III B) II and IV C) I and IV D) II, III, and IV
Which of the following statements are correct regarding the characteristics of a conservatorship (guardianship of the estate) used to care for an incompetent person's property? I. the powers of the conservator are set forth in either a revocable living trust or a contingent standby trust. II. the conservator may have to file annual reports regarding the status of the assets under his care. III. the conservator may be required to post a performance bond. IV. the conservator has a fiduciary duty to care for the incompetent person's property. A) I, II, III, and IV B) I and II C) II, III, and IV D) I and IV
An administrator of an estate differs from an executor of a will in that an administrator a. has fiduciary responsibility for real property. b. has fiduciary responsibility for personal property. c. has fiduciary responsibility in a testate distribution. d. is appointed by the court.
What guidelines must be followed to classify a transaction as associated with the principal of an estate or as an income transaction? Select one: a.The decedent's intentions or state laws b.Generally accepted accounting principles c.The Internal Revenue Code d.State estate laws e.Federal estate laws
In the context of estate planning, it is correct to say that: * Estate planning is a definite plan for the administration and disposition of one's property during one's lifetime and at one's death. State laws always determine the distribution of our estate after our death. Once we cannot predict the future, we should plan our estate only a little before our death. The executor is a person who assumes responsibility for providing childrem with personal care and managing the deceased's estate for them.
If you don't have a will when you die, the state will take steps to see that your assets are distributed as you might have wished. a) True b) False