15. Tom transferred $2 million into an irrevocable trust this year. The trust provided that income would accumulate for one year. After one year, the income would be distributed to Toms daughter, Toni, and the principal would be distributed to his granddaughter, Melanie. Tom allocated $500,000 of his remaining GST exemption to the $2 million transferred to the trust (assume no other assets were transferred to the trust). What is the inclusion ratio of the trust?

1. 0
2. .25
3. .5
4. .75

16. Jude and Kyra have a withdrawal right in a trust that allows each of them to withdraw one-half of the assets transferred to the trust each year within a 30 day period. This year, their mother transferred $20,000 to the trust (i.e., each child had the right to withdraw $10,000) and neither child withdrew any money (after the transfer, the trust had $20,000 in assets). What is the gift tax consequence of this lapse (hint: think about the 5% and $5,000 rule)?

1. Jude and Kyra have made taxable gifts to each other of $5,000.
2. Jude and Kyra have made taxable gifts to each other of $10,000.
3. Jude and Kyra have made taxable gifts to each other of $15,000.
4. Jude and Kyra have made taxable gifts to each other of $20,000.

19. George and Cecelia wish to leave their estate to their niece Annie and to their favorite charity, the American Red Cross. Which of the following assets is the least efficient to leave to Annie?

1. They have a Roth IRA worth $550,000.
2. They have a 401(k) worth $550,000.
3. Their Apple stock has a basis of $10,000 and is now worth $550,000.
4. Their home is worth $550,000. They purchased it 10 years ago for $100,000.