Tax Research and Planning Exam Bank
Course Introduction
Tax Research and Planning is a course designed to equip students with the practical skills necessary to identify, analyze, and resolve complex tax issues encountered in business and individual contexts. The course emphasizes methods for effective tax research, including the use of primary and secondary tax authority sources such as the Internal Revenue Code, Treasury regulations, IRS rulings, and judicial decisions. Students learn to apply professional judgment in evaluating tax issues, drafting research memos, and communicating recommendations clearly. Additionally, the course explores strategic tax planning techniques aimed at minimizing tax liabilities, complying with tax laws, and addressing ethical considerations in tax practice. Through case studies and practical exercises, students develop proficiency in navigating tax databases, conducting literature reviews, and formulating tailored tax advice for a variety of clients.
Recommended Textbook
South Western Federal Taxation 2016 Comprehensive 39th Edition by William H. Hoffman
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28 Chapters
4028 Verified Questions
4028 Flashcards
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2
Chapter 1: An Introduction to Taxation and Understanding the Tax Law
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194 Verified Questions
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Sample Questions
Q1) Late filing and statute limitations (deficiency situations)
Answer: a
Q2) Under Clint's will,all of his property passes to either the Lutheran Church or to his wife.No Federal estate tax will be due on Clint's death in 2015.
A)True
B)False
Answer: True
Q3) If a taxpayer files early (i.e. ,before the due date of the return),the statute of limitations on assessments begins on the date the return is filed.
A)True
B)False
Answer: False
Q4) What is the difference between an inheritance tax and an estate tax? Who imposes these taxes?
Answer: An inheritance tax is a tax on the right to receive property from a decedent.An estate tax is imposed on the right to pass property at death.The Federal government imposes estate taxes,while states impose inheritance taxes.Some states impose both,while others impose neither.
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Chapter 2: Working With the Tax Law
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Sample Questions
Q1) A researcher can find tax information on home page sites of:
A)Governmental bodies.
B)Tax academics.
C)Publishers.
D)CPA firms.
E)All of these.
Answer: E
Q2) Which publisher offers the United States Tax Reporter?
A)Research Institute of America
B)Commerce Clearing House
C)LexisNexis
D)Tax Analysts
E)None of these
Answer: A
Q3) Technical Advice Memoranda may not be cited as precedents by taxpayers.
A)True
B)False
Answer: True
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Chapter 3: Computing the Tax
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Sample Questions
Q1) In January 2015,Jake's wife dies and he does not remarry.For tax year 2015,Jake may not be able to use the filing status available to married persons filing joint returns.
A)True
B)False
Answer: True
Q2) Under the Federal income tax formula for individuals,the determination of adjusted gross income (AGI) precedes that of taxable income (TI).
A)True
B)False
Answer: True
Q3) Scholarship funds for tuition
Answer: h
Q4) Age of a qualifying child
Answer: d
Q5) Scholarship funds for room and board
Answer: g
Q6) Basic standard deduction
Answer: a
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Chapter 4: Gross Income: Concepts and Inclusions
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Sample Questions
Q1) When a business is operated as an S corporation,a disadvantage is that the shareholder must pay the tax on his or her share of the S corporation's income even though the S corporation did not distribute the income to the shareholder.
A)True
B)False
Q2) Turner,Inc. ,provides group term life insurance to the officers of the corporation only.Janet,a vice-president,received $450,000 of coverage for the year at a cost to Turner,Inc.of $5,600.The Uniform Premiums (based on Janet's age) are $15 a year for $1,000 protection.How much of this must Janet include in gross income this year?
A)$0.
B)$2,700.
C)$5,600.
D)$6,000.
E)None of these.
Q3) In some foreign countries,the tax law specifically designates the types of income items that are includible in gross income.How does this approach compare with the U.S.Internal Revenue Code (§ 61)? What is a major advantage to the approach used in the U.S.tax law?
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Chapter 5: Gross Income: Exclusions
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Sample Questions
Q1) Albert had a terminal illness which required almost constant nursing care for the remaining two years of his estimated life,according to his doctor.Albert had a life insurance policy with a face amount of $100,000.Albert had paid $25,000 of premiums on the policy.The insurance company has offered to pay him $80,000 to cancel the policy,although its cash surrender value was only $55,000.Albert accepted the $80,000.Albert used $15,000 to pay his medical expenses.Albert made a miraculous recovery and lived another 20 years.As a result of cashing in the policy:
A)Albert must recognize $55,000 of gross income,but he has $15,000 of deductible medical expenses.
B)Albert must recognize $65,000 ($80,000 - $15,000) of gross income.
C)Albert must recognize $40,000 ($80,000 - $25,000 - $15,000) of gross income.
D)Albert is not required to recognize any gross income because of his terminal illness. E)None of these.
Q2) The CEO of Cirtronics Inc. ,discovered that the company's competitor had adopted a cafeteria plan for its employees.The CEO is concerned about retaining his talented employees and would like you to provide a brief explanation as to why a cafeteria plan may be attractive to the company's employees.
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Page 7
Chapter 6: Deductions and Losses: in General
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Sample Questions
Q1) LD Partnership,a cash basis taxpayer,purchases land and a building for $200,000 with $150,000 of the cost being allocated to the building.The gross receipts of the partnership are less than $100,000.LD must capitalize the $50,000 paid for the land,but can deduct the $150,000 paid for the building in the current tax year.
A)True
B)False
Q2) A hobby activity can result in all of the hobby income being included in AGI and no deductions being allowed.
A)True
B)False
Q3) If a vacation home is classified as primarily personal use (i.e. ,rented for fewer than 15 days),none of the related expenses can be deducted.
A)True
B)False
Q4) For a vacation home to be classified in the personal/rental use category,what attributes must be present?
Q5) In distinguishing whether an activity is a hobby or a trade or business,discuss the presumptive rule.
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Chapter 7: Deductions and Losses: Certain Business
Expenses and Losses
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Sample Questions
Q1) In determining whether a debt is a business or nonbusiness bad debt,the debtor's use of the borrowed funds is important.
A)True
B)False
Q2) Bruce,who is single,had the following items for the current year: Salary of $80,000. Gain of $20,000 on the sale of § 1244 stock acquired two years earlier. Loss of $75,000 on the sale of § 1244 stock acquired three years earlier. Worthless stock of $15,000.The stock was acquired on February 1 of the prior year and became worthless on January 15 of the current year. Determine Bruce's AGI for the current year.
A)$27,000
B)$38,000
C)$42,000
D)$47,000
E)None of the above
Q3) A loss is not allowed for a security that declines in value.
A)True
B)False
Q4) How is qualified production activities income (QPAI) calculated?
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Q5) Why was the domestic production activities deduction (DPAD) enacted by Congress?
Chapter 8: Depreciation, cost Recovery, amortization, and Depletion
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Sample Questions
Q1) Under the alternative depreciation system (ADS),the half-year convention must be used for personalty.
A)True
B)False
Q2) In a farming business,MACRS straight-line cost recovery is required for all fruit bearing trees.
A)True
B)False
Q3) On August 20,2015,May placed in service a building for her business.On November 28,2015,May paid $80,000 for improvements to the building.What is May's cost recovery deduction for the building improvements in 2015?
Q4) Property used for the production of income is not eligible for § 179 expensing.
A)True
B)False
Q5) Polly purchased a new hotel on July 20,2015,for $6,000,000.On January 20,2022,the building was sold.Determine the cost recovery deduction for the year of the sale.
Q6) Discuss the beneficial tax consequences of an SUV not being classified as a passenger automobile.
Page 10
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Chapter 9: Deductions: Employee and
Self-Employed-Related Expenses
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Sample Questions
Q1) After the automatic mileage rate has been set by the IRS for a year,it cannot later be changed by the IRS.
A)True
B)False
Q2) Travis holds rights to a skybox (containing 10 seats) at Memorial Stadium which he uses to entertain key clients.At one sporting event,he took only six clients since three were ill.Even so,Travis may still deduct the appropriate cost of all ten seats.
A)True
B)False
Q3) Concerning the deduction for moving expenses,what circumstances,if any,will excuse a taxpayer from meeting the time test of 39 or 78 weeks?
Q4) If a business retains someone to provide services,that person may either be an employee or be self-employed (i.e. ,independent contractor).
a.What are the tax advantages to the business of having the service provider classified as self-employed?
b.What are the advantages and disadvantages to the service provider of self-employed status?
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Chapter 10: Deductions and Losses: Certain Itemized
Deductions
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Sample Questions
Q1) In 2015,Dena traveled 600 miles for specialized medical treatment that was not available in her hometown.She paid $90 for meals during the trip,$145 for a hotel room for one night,and $15 in parking fees.She did not keep records of other out-of-pocket costs for transportation.Dena can include $203 in computing her medical expenses. A)True
B)False
Q2) The election to itemize is appropriate when total itemized deductions are less than the standard deduction based on the taxpayer's filing status. A)True
B)False
Q3) For the past several years,Jeanne and her two sisters have taken turns claiming a dependency exemption deduction for their mother under a multiple support agreement.This year Jeanne will be entitled to the exemption,and her mother needs money for surgery and new eyeglasses.Should Jeanne pay for the medical expenses as her share of her mother's expenses? How would this benefit Jeanne?
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Chapter 11: Investor Losses
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Sample Questions
Q1) Describe the general rules that limit the deduction of investment interest expense.
Q2) Wes's at-risk amount in a passive activity is $25,000 at the beginning of the current year.His current loss from the activity is $35,000 and he has no passive activity income.At the end of the current year,which of the following statements is incorrect?
A)Wes has a loss of $25,000 suspended under the passive loss rules.
B)Wes has an at-risk amount in the activity of $0.
C)Wes has a loss of $10,000 suspended under the at-risk rules.
D)Wes has a loss of $35,000 suspended under the passive loss rules.
E)None of the above is incorrect.
Q3) Treatment of an installment sale of a passive activity.
Q4) Bob realized a long-term capital gain of $8,000.In calculating his net investment income,Bob may elect to include the gain in investment income.
A)True
B)False
Q5) Describe the types of activities and taxpayers that are subject to the at-risk rules.
Q6) Treatment of suspended credits when passive activity is sold at a loss.
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Page 13
Chapter 12: Tax Credits and Payments
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Sample Questions
Q1) Cheryl is single,has one child (age 6),and files as head of household during 2015.Her salary for the year is $19,500.She qualifies for an earned income credit of the following amount:
A)$0.
B)$3,038.
C)$3,137.
D)$3,359.
E)None of the above.
Q2) Black Company paid wages of $180,000,of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:
A)$140,000.
B)$164,000.
C)$166,000.
D)$180,000.
E)None of the above.
Q3) Jack and Jill are married,have three children,and have earnings during 2015 of $28,500.Do they qualify for the earned income credit? If so,calculate the amount of credit that is available to them.
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Page 14
Chapter 13: Property Transactions: Determination of Gain or
Loss, basis Considerations, and Nontaxabl
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Sample Questions
Q1) Joseph converts a building (adjusted basis of $50,000 and fair market value of $40,000) from personal use to business use.Justin receives a building with a $40,000 fair market value ($50,000 donor's adjusted basis) from his mother as a gift.Discuss the tax consequences with respect to Joseph's and Justin's adjusted basis.
Q2) Deidra has owned and occupied her principal residence for 10 years.Two and one-half years ago she married Doug who moved into her house.Doug has never owned a home.When Deidra is transferred to another city,she sells the house and has a realized gain of $425,000.Deidra can exclude the realized gain of $425,000 from her gross income under § 121 if she and Doug file a joint return.
A)True
B)False
Q3) Milton purchases land and a factory building for his business for $300,000 with $100,000 being allocated to the land.During the first year,Milton deducts cost recovery of $4,922.Milton's adjusted basis for the building at the end of the first year is $195,078 ($200,000 - $4,922).
A)True
B)False
Q4) Define a bargain purchase of property and discuss the related tax consequences.
Page 15
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Chapter 14: Property Transactions: Capital Gains and
Losses, section 1231 and Recapture Provisions
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Q1) Since the Code section that defines "capital asset" says what is not a capital asset,other Code sections have to help determine what is and what is not a capital gain or loss.
A)True
B)False
Q2) The subdivision of real property into lots for resale when no substantial physical improvements have been made to the property never causes the gain from sale of the lots to be treated as ordinary income.
A)True
B)False
Q3) Mike is a self-employed TV technician.He is usually paid as soon as he completes repairs,but occasionally bills a customer with payment expected within 30 days.At the end of the year he has $2,500 of receivables outstanding.He expects to collect $1,200 of this and write off the remainder.Mike is a cash basis taxpayer and had net earnings from his business (not including the effect of the items above) of $55,000.He also had $3,500 interest income,$200 gambling winnings,and sold corporate stock for $7,000.The stock had been purchased in 2011 for $8,200.Mike is single,has no dependents,and claims the standard deduction.What is his 2015 taxable income? (Ignore the self-employment tax deduction. )
Page 16
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Chapter 15: Alternative Minimum Tax
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Sample Questions
Q1) Will all AMT adjustments reverse? That is,do they relate to timing differences?
Q2) What is the purpose of the AMT exemption amount? What is the maximum amount for each filing status for an individual taxpayer and for a corporate taxpayer?
Q3) Ashby,who is single and age 30,provides you with the following information from his financial records for 2015. Regular income tax liability $ 47,228 AMT positive adjustments 40,000 AMT preferences 20,000 Taxable income 195,000 Calculate his AMT exemption for 2015.
A)$0
B)$17,000
C)$26,800
D)$53,600
E)None of the above
Q4) Cher sold undeveloped land that originally cost $150,000 for $225,000.There is a positive AMT adjustment of $75,000 associated with the sale of the land.
A)True
B)False
Q5) Are the AMT rates for the individual taxpayer the same as those for a corporate taxpayer?
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Chapter 16: Accounting Periods and Methods
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Sample Questions
Q1) In the case of a sale reported under the installment method,gain is recognized in each year the seller collects on the installment contract.
A)True
B)False
Q2) Generally,deductions for additions to reserves for estimated future costs (e.g. ,an allowance for estimated warranty costs) are not allowed for Federal income tax purposes because allowing the deduction would:
A)Result in a mismatching of revenues and expenses.
B)Violate established public policy.
C)Violate the all events test and economic performance requirement.
D)Violate the tax benefit rule.
E)None of the above.
Q3) Which of the following statements regarding a 52-53 week tax year is correct?
A)The year-end must be the same day of the week in all years.
B)The year cannot contain more than 366 calendar days.
C)Every four years,there will be only 51 weeks.
D)The year cannot end on a Sunday.
E)None of the above.
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Chapter 17: Corporations: Introduction and Operating Rules
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Sample Questions
Q1) Briefly discuss the requirements for the dividends received deduction.
Q2) Grebe Corporation,a closely held corporation that is not a PSC,had $75,000 of net active income,$60,000 of portfolio income,and a $105,000 passive activity loss during the year.How much of the passive activity loss can Grebe deduct in the current year?
A)$0
B)$60,000
C)$105,000
D)$135,000
E)None of the above
Q3) Schedule M-1 of Form 1120 is used to reconcile financial net income with taxable income reported on the corporation's income tax return as follows: net income per books + additions - subtractions = taxable income.Which of the following items is an addition on Schedule M-1?
A)Dividends received deduction.
B)Proceeds of life insurance paid on death of key employee.
C)Excess of capital losses over capital gains.
D)Tax-exempt interest.
E)None of the above.
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Chapter 18: Corporations: Organization and Capital Structure
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Sample Questions
Q1) Gabriella and Maria form Luster Corporation with each receiving 50 shares of its stock.Gabriella transfers cash of $50,000,while Maria transfers a proprietary formula (basis of $0;fair market value of $50,000).Neither Gabriella nor Maria will recognize gain on the transfer.
A)True
B)False
Q2) Dick,a cash basis taxpayer,incorporates his sole proprietorship.He transfers the following items to newly created Orange Corporation. Adjusted Basis Fair Market Value
Cash $ 10,000 $ 10,000 Building 120,000 175,000 Mortgage payable (secured by the building and held for 15 years) 135,000 135,000 With respect to this transaction:
A)Orange Corporation's basis in the building is $120,000.
B)Dick has no recognized gain.
C)Dick has a recognized gain of $5,000.
D)Dick has a recognized gain of $10,000.
E)None of the above.
Q3) What is the rationale underlying the tax deferral treatment available under § 351?
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Page 20
Chapter 19: Corporations: Distributions Not in Complete Liquidation
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Q1) Property distributed by a corporation as a dividend is subject to a liability in excess of its basis.For purposes of determining gain on the distribution,the basis of the property is treated as being not less than the amount of liability.
A)True
B)False
Q2) Which of the following statements is incorrect with respect to determining current E & P?
A)All tax-exempt income should be added back to taxable income.
B)Dividends received deductions should be added back to taxable income.
C)Charitable contributions in excess of the 10% of taxable income limit should be subtracted from taxable income.
D)Federal income tax refunds should be added back to taxable income.
E)None of the above statements are incorrect.
Q3) Intangible drilling costs deducted currently.
Q4) Loss on sale between related parties in 2015.
Q5) To determine E & P,some (but not all) previously excluded income items are added back to taxable income.
A)True B)False
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Chapter 20: Corporations: Distributions in Complete
Liquidation and an Overview of Reorganizations
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Q1) One advantage of acquiring a corporation via an asset purchase instead of a stock purchase is that an asset purchase avoids the transfer of the acquired corporation's liabilities.
A)True
B)False
Q2) Brown Corporation purchased 85% of the stock of Green Corporation five years ago for $850,000.In the current year,Brown Corporation liquidates Green Corporation and acquires assets with a basis to Green Corporation of $700,000 (fair market value of $1.1 million).Brown Corporation will have a basis in the assets of $850,000,the same as Brown's basis in its Green stock.
A)True
B)False
Q3) A subsidiary is liquidated pursuant to § 332.The parent has held 100% of the stock in the subsidiary for the past ten years.The subsidiary has a net operating loss carryover of $400,000.The net operating loss does not carry over to the parent.
A)True
B)False
Q4) Discuss the role of letter rulings in corporate reorganizations.
Page 22
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Chapter 21: Partnerships
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Q1) Which of the following statements is not a requirement of the substantial economic effect test?
A)Income,gains,losses,and deductions must be allocated to the partners in accordance with their capital contributions.
B)An allocation of income must increase the partner's capital account balance,and an allocation of deduction must decrease the partner's capital account balance.
C)A partner with a negative capital account balance must "restore" that capital account,generally by contributing cash to the partnership.
D)On liquidation of the partner's interest in the partnership,the partner must receive assets that have a fair market value equal to that partner's (positive) capital account balance.
E)All of the above statements are requirements of the substantial economic effect test.
Q2) On a corporate Form 1120,Schedule M-1 (or M-3) is used to reconcile book and tax income,and Schedule M-2 reconciles retained earnings to the amounts shown on Schedule L.How are these reconciliations accomplished on a partnership return? What additional information must be provided?
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Chapter 22: S Corporations
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Q1) A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to S status on February 14.By the end of the year,$60,000 of these receivables are collected.Calculate any built-in gains tax,assuming that there is sufficient taxable income.
A)$0
B)$10,000
C)$21,000
D)$35,000
E)Some other amount
Q2) Beginning in 2015,the AAA of Amit,Inc. ,an S corporation,has a balance of $614,000.During the year,the following items occur. Operating income $501,000 Interest income 6,500 Dividend income 13,020 Municipal bond interest income 6,000 Long-term capital loss from sale of investment land 7,400 Section 179 depreciation deduction 6,000 Charitable contributions 19,000 Cash distributions 57,000 Amit's ending AAA balance is:
A)$1,055,620.
B)$1,185,150.
C)$1,191,150.
D)$1,242,150.
E)Some other amount.
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Page 24
Chapter 23: Exempt Entities
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Q1) Pearl Inc. ,a tax-exempt organization,leases land,building,and machinery to Purple Partnership for a 5-year period.The rental income from the land and building is $100,000,with related expenses of $40,000.The rental income from the machinery is $9,000,with related expenses of $3,000.What adjustment must be made to net unrelated business income?
Q2) Form 990.
Q3) To satisfy the "not for profit" requirement for exempt status,the entity may not be engaged in a trade or business.
A)True
B)False
Q4) Which exempt organizations are not required to file an annual Federal tax return?
Q5) Not an exempt organization
Q6) If personal property is leased with real property and more than 45% of the rent income under the lease is from personal property,all of the rent income is subject to the unrelated business income tax.
A)True
B)False
Q7) § 501(c)(5) labor organization
Page 25
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Chapter 24: Multistate Corporate Taxation
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Q1) A state sales/use tax is designed to be collected by the ____________________ (seller/purchaser) of the product and then remitted to the state.
Q2) A unitary business applies a combined apportionment formula,including data from operations of all of the affiliates.
A)True
B)False
Q3) S corporations flow-through income amounts to its shareholders,and most states require a withholding of shareholder taxes on the allocated amounts.
A)True
B)False
Q4) Most of the U.S.states have adopted an alternative minimum tax,similar to the Federal system,in taxing the income of corporations.
A)True
B)False
Q5) Almost all of the states allow ____________________ treatment to an LLC for income tax purposes.
Q6) State income tax expense.
Q7) Purchasing ads that show up on search-result screens for internet browsers.
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Chapter 25: Taxation of International Transactions
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Q1) ForCo,a foreign corporation not engaged in a U.S.trade or business,recognizes a $3 million gain from the sale of land located in the United States.The amount realized on the sale was $50 million.Absent any exceptions,what is the required withholding amount on the part of the purchaser of this land?
A)$0
B)$300,000
C)$3 million
D)$5 million
Q2) U.S.taxpayers earning income outside the United States.
Q3) Generally,accrued foreign income taxes are translated at the:
A)Exchange rate when the taxes are paid.
B)Exchange rate on the date when the taxes are accrued.
C)Average exchange rate for the tax year to which the taxes relate.
D)Average exchange rate for the last five tax years.
Q4) ForCo,a subsidiary of a U.S.corporation incorporated in Belgium,manufactures widgets in Belgium and sells the widgets to its 100%-owned subsidiary in Germany.The income from the sale of widgets is not Subpart F foreign base company sales income.
A)True
B)False
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Chapter 26: Tax Practice and Ethics
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Sample Questions
Q1) Quon filed his Federal income tax return on time,but he did not remit the full balance due.Compute Quon's failure to pay penalty in each of the following cases.The IRS has not yet issued a deficiency notice.
a.Three months late,$5,000 additional tax due.
b.Nine months late,$5,000 additional tax due.
c.Five years late,$5,000 additional tax due.
Q2) Filing an improper refund claim.
Q3) Chung's AGI last year was $180,000.Her Federal income tax came to $45,000,which she paid through a combination of withholding and estimated payments.This year,her AGI will be $250,000,with a projected tax liability of $60,000,all to be paid through estimates.Ignore the annualized income method.Compute Chung's quarterly estimated payment schedule for this year.
Q4) Circular 230 applies to all paid tax practitioners.But attorneys,CPAs,and enrolled agents are exempt from the Circular 230 rules,because each of the groups has its own code of professional conduct.
A)True
B)False
Q5) A privilege of ____________________ exists between a tax preparer and the client as to tax advice rendered.
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Chapter 27: Family Tax Planning
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Q1) In 2005,Noah and Kelly acquire real estate for $2,000,000,with Noah furnishing $400,000 of the purchase price and Kelly providing the balance.Title to the property is listed as: "Noah and Kelly,equal tenants in common." Noah dies first in 2015,when the real estate is worth $4,000,000.
a.Were there any tax consequences in 2005? Explain.
a.and
b.
How much,as to the real estate,is included in Noah's gross estate?
b. ,would it make any difference whether Noah and Kelly are brother and sister or husband and wife?
c. As to parts
Q2) For both the Federal gift and estate tax,a deduction is allowed for certain transfers to a spouse.
A)True
B)False
Q3) Using his own funds,Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace predeceases Nadine.
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Chapter 28: Income Taxation of Trusts and Estates
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Q1) The Doyle Trust reports distributable net income for the year of $100,000 and no income from tax-exempt sources.Under the terms of the trust instrument,the trustee must distribute $30,000 to Roger and $30,000 to Sally.After payment of these amounts,the trustee is empowered to make additional distributions at its discretion.Exercising this authority,the trustee distributes an additional $25,000 to Roger and $25,000 to Sally.How much income from the trust must Sally recognize?
A)$25,000.
B)$30,000.
C)$50,000.
D)$55,000.
Q2) When DNI includes exempt interest income,the beneficiary includes less than the full amount of DNI in current-year gross income.
A)True
B)False
Q3) When the Holloway Trust terminated this year,it held a $1 million NOL carryforward.How is the loss carryforward treated? Does it expire with the trust or can another taxpayer use it? Be specific.
Q4) The entity was created by either a decedent or a living person.
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