American College Exam HS330 Topic 1 Question 91 Discussion

Actual exam question for American College's HS330 exam

Question #: 91
Topic #: 1

All the following statements concerning a federal estate tax deduction for a bequest or gift to a qualified charity are correct EXCEPT:

AA life insurance policy that was assigned to a charity as a gift less than 3 years prior to the insured's death qualifies for a charitable deduction.

BThe amount of a charitable deduction is reduced by any taxes and administrative expenses chargeable against the bequest.

CAn estate may deduct the value of the remainder interest in a charitable remainder trust.

DThe amount of a charitable deduction may not exceed 50 percent of a decedent's adjusted gross estate.

Show Suggested Answer

Suggested Answer: D

by Yvonne at Jul 02, 2024, 04:47 AM

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Shenika

4 months ago

I'm pretty sure the correct answer is A. You can't deduct a life insurance policy like that, it's just too close to the death event.

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Cecilia

4 months ago

Haha, imagine trying to claim a deduction for a life insurance policy you gave away just a few years before kicking the bucket. Talk about suspicious!

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Ardella

4 months ago

B and C look good to me. Reducing the deduction by taxes and expenses, and deducting the remainder interest in a charitable trust, those seem like standard rules.

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5 months ago

Option A is definitely incorrect. How can a life insurance policy assigned to a charity less than 3 years before death qualify for a deduction? That's just asking for trouble.

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