Which of the following statements concerning estates and trusts is (are) correct?
1.Both estates and trusts come into being by operation of law.
2.The personal representative of an estate and the trustee have similar fiduciary responsibilities.

• A. 1 only
• B. Neither 1 nor 2
• C. Both 1 and 2
• D. 2 only

A married man died this year leaving a gross estate of $2,700,000. Some additional facts concerning his estate are:
*Administration expenses and debts $300,000
*Marital deduction 800,000
*Applicable credit amount (2005) 555,800
*Applicable exclusion amount (2005) 1,500,000
*State death taxes payable 17,700
Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over $1,000,000 but not over $1,250,000, the tentative tax is $345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over $1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000 the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000. Based on these facts, the net federal tax payable is

• A. $42,865
• B. $47,065
• C. 0
• D. $37,035

A married man died this year leaving a gross estate of $2,700,000. Some additional facts concerning his estate are:
1.Administration expenses and debts $300,000
2.Marital deduction 800,000
3.Applicable credit amount (2005) 555,800
4.Applicable exclusion amount (2005) 1,500,000
5.State death taxes payable 17,700
Under the Unified Rate Schedule for computing estate taxes if the amount with respect to which the tentative tax to be computed is over $1,000,000 but not over $1,250,000, the tentative tax is $345,800, plus 41 percent of the excess of such amount over $1,000,000. If the amount is over $1,250,000 but not over $1,500,000, the tentative tax is then $448,300, plus 43 percent of the excess of such amount over $1,250,000. If the amount is over $1,500,000 but not over $2,000,000 the tentative tax is then $555,800 plus 45% of the excess of such amount over $1,500,000. Based on these facts, the net federal tax payable is

• A. $42,865
• B. $47,065
• C. 0
• D. $37,035

All the following statements concerning transfers at death under a will are correct EXCEPT:

• A. Specific bequests of a decedent's property are satisfied prior to distribution of the decedent's residuary estate.
• B. If during lifetime a decedent disposed of property that was the subject of a specific bequest,ademption occurs.
• C. It is common for a will to contain a clause that exempts the executor from posting bond.
• D. The most appropriate way to sever a joint tenancy with right of survivorship is for the joint tenant-decedent to make a specific bequest of the property under a will.

A father deeded a house as a gift to his daughter in 1990 but retained the right to live in it until his death. He died this year while still living in the house. The following are relevant facts:
The father bought the property in 1980 for $130,000. The fair market value of the property when the gift was made in 1990 was $150,000. The father filed a timely gift tax return but paid no gift tax because of the applicable credit amount. The fair market value of the property at the father's death was $220,000. The daughter sold the property 3 months after her father's death for $220,000. She had a gain of?

• A. $220,000
• B. 0
• C. $140,000
• D. $120,000