Estate and Gift Tax
This topic covers gross estate, taxable estate, unified credit, portability, marital deduction, jointly held property, life insurance, retirement accounts, Form 706, gifts, gift-splitting, annual exclusion, Form 709, and GST concepts.
How to study for EA Part 1
Build every answer around taxpayer data, filing status, income category, deduction or credit eligibility, forms, limitations, and reporting consequences.
Core concepts
Concept 1
Estate and Gift Tax questions test whether an enrolled agent candidate can apply individual income tax rules to Form 1040 fact patterns for the tested tax year.
Exam cue: Identify taxpayer, filing status, dependency, tax year, source document, form, and whether the issue is income, deduction, credit, tax, advice, or specialized return.
Concept 2
The best answer usually identifies filing status, taxpayer data, income category, deduction or credit rule, limitation, reporting form, and penalty consequence before calculating.
Exam cue: Check thresholds, phaseouts, basis, holding period, substantiation, due dates, and whether the item is refundable, nonrefundable, taxable, excluded, or deferred.
Concept 3
Eliminate answers that ignore documentation, mix refundable and nonrefundable credits, skip basis, overlook special filing statuses, or use a prior-year rule when current-year facts control.
Exam cue: Tie the result to Form 1040 reporting, schedules, information returns, estimated tax, penalty relief, or future-year planning.
Risk pitfalls and guardrails
Calculating before deciding whether the taxpayer is eligible for the status, deduction, credit, exclusion, or reporting exception.
Guardrail: Use a 15-second safety pause before finalizing your action.
Using general tax intuition instead of the IRS outline's specific individual-return categories.
Guardrail: Use a 15-second safety pause before finalizing your action.
Missing forms, due dates, carryovers, international reporting, estate and gift filing, or spouse relief consequences.
Guardrail: Use a 15-second safety pause before finalizing your action.
Memory anchors
Gross Estate
Gross estate includes property interests and certain transfers included under estate tax rules.
Taxable Estate
Taxable estate generally equals gross estate less allowable deductions.
Unified Credit
Unified credit offsets estate and gift tax under the unified transfer tax system.
Portability
Portability can allow a surviving spouse to use a deceased spouse's unused exclusion when elected.
Marital Deduction
The marital deduction can defer estate tax for qualifying transfers to a surviving spouse.
Joint Property
Jointly held property may be included in the estate depending on ownership and contribution rules.
Annual Exclusion
The annual exclusion can exclude qualifying present-interest gifts up to the annual amount.
Gift Splitting
Gift splitting allows spouses to treat a gift by one spouse as made one-half by each when requirements are met.
Form 706
Form 706 reports estate tax matters when filing requirements are met.
Form 709
Form 709 reports taxable gifts and certain generation-skipping transfer matters.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
An individual gives property to an adult friend for less than full consideration. Who is generally responsible for any federal gift tax?
A donor gives $19,000 cash to one adult child and $19,000 cash to another adult child during 2025. No other gifts are made. What is the general annual-exclusion result?
Answer all questions to submit.
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Move forward only after this module is stable.
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