Practice Test Geeks(CES) Certified Estate and Trust Specialist Practice Test
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Taxation of Estates & Trusts Flashcards

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

Read the first 7 Taxation of Estates & Trusts flashcards as text

  1. A Qualified Domestic Trust (QDOT) is used when a surviving spouse is:

    Answer: A non-U.S. citizen

    A QDOT under IRC §2056A allows the marital deduction for transfers to a non-U.S. citizen surviving spouse, with estate tax deferred until distributions or death.

  2. Which of the following is an above-the-line deduction available to trusts and estates on Form 1041?

    Answer: Income distribution deduction for amounts distributed to beneficiaries

    The income distribution deduction allows trusts and estates to deduct amounts distributed to beneficiaries (limited to DNI), shifting the tax burden to beneficiaries.

  3. For estate and gift tax purposes, what is the annual gift tax exclusion per donee (2024)?

    Answer: $18,000

    The annual gift tax exclusion is $18,000 per donee in 2024, indexed for inflation in $1,000 increments.

  4. IRC §2503(e) provides an exclusion from gift tax for amounts paid directly to an educational institution for tuition. This exclusion is:

    Answer: Unlimited in amount but only for tuition (not room and board)

    Payments made directly to an educational institution for tuition qualify for an unlimited exclusion under §2503(e), but only for tuition — not fees, books, or room and board.

  5. A trust files a fiscal year return. When must the beneficiaries include trust income in their own tax returns?

    Answer: In the calendar year in which the trust's fiscal year ends

    Beneficiaries include trust income in their calendar year in which the trust's fiscal year ends, under the 'conduit' timing rules.

  6. Which estate tax concept determines the value of property when a decedent and another person hold property under a joint tenancy with right of survivorship?

    Answer: The fractional inclusion rule based on the decedent's proportionate contribution

    Under IRC §2040, the full value of joint tenancy property is included in the decedent's estate, reduced by the portion attributable to the surviving joint tenant's contributions.

  7. A complex trust accumulates income rather than distributing it. The trust's taxable income is $30,000. What personal exemption may the trustee deduct on Form 1041?

    Answer: $100

    A complex trust receives a personal exemption of $100 on Form 1041, while simple trusts receive $300 and estates receive $600.