1. Which of the following, in addition to current arrangements, would generate a taxable gift?

A. A gift of$14,000 from the growth fund to Harmony
B. A split gift of $28,000 from Fred and Mary to Ted and Maria from the value fund
C. A gift of Fred's entire interest in the residence to Mary
D. A payment in excess of$14,000 to Felicity's high school for her tuition

2. Seriously contemplating early retirement, Fred wants to know the gift tax payable if he gives Ted 50% of his business interest and sells him the other 50% on a 20-year installment note. Which of the following is correct?

A. Any gift tax is payable ratably over a 20-year period.
B. No gift tax is payable.
C. The gift tax due is $1,750,000.
D. Under this arrangement, Ted would be responsible for the payment of any gift tax.

3. In the current situation, which of the following is the most serious weakness in terms of the Ferris family's planning for incapacity?

A. Inadequate disability insurance for Fred
B. Inadvertent disqualification for Ned's government assistance
C. Lack of a buy-sell agreement, funded with disability buyout insurance
D. Insufficient protection against long-term nursing care expenses

4. If Fred becomes disabled, which of the following plans currently provides protection?

A. The key person disability insurance of the business
B. Disability buyout insurance
C. Business overhead expense disability plan
D. Group long-term disability plan

5. If Fred dies, which of the following is not included in his gross estate?

A. The funds set aside for Felicity's education
B. The group life insurance
C. The individual term insurance
D. TheSPDA