Cannon Trust School 1 - Exam Review Study Guide/Prep
Questions With Correct Answers 2026 Rated A+
Real Property
Refers to land, buildings or other fixtures on land and carious rights which go along with land
and some interest in it
Personal Property
Anything that is not real property, immovability may be m moved with or by its owner
Tangible Property
Personal property that can be moved and which has physical existence
Example: Car, clothes, furniture, tools, jewelry
Intangible Property
Personal property which are not capable or being touched or seen.
Example: Stocks & bonds, ownership of debt, right to bring legal action
Present Interest
A present interest is the right to immediately use, possess, or enjoy property or income from
property.
Life Estate
When a fee simple owner grants ownership of the property to another person for the duration
of that persons life, and become the "Life Tenant"
Term of Years
Someone has the right to use and occupy a property for a specific amount of time
Fee Simple
Full ownership of real property, right to pass full ownership to someone else, whether during
the original owners lifetime or upon his death; absolute ownership
Remainder Interest
, Is an interest where the property will or may be passed to successive owner(s) at a given time or
at the occurrence of an event
Reversionary Interest
Interest where the property will or may be returned to the original owner
Differentiate what is subject to probate or avoids probate
Range of sustainable unitrust payout percentages
3-5%
Income
The return received on the use or investment
Examples: Rental income, interest earned, cash dividends from stocks, business income
Principal
Corpus of trust that is to ultimately pass to the remainder
Examples: Capital gains, insurance proceeds, stock dividends, sales proceeds, proceeds from a
domain seizure
Examples of Income Credits and Debits (e.g. "maintenance")
Income taxes, ordinary repairs or maintenance of trust property, portion of fees and expenses
Examples of Principal/Corpus/Capital Credits and Debits (e.g. "Upgrade" or "Capital
Improvement"
Portion of fees and expenses, fees for purchase/sale of asset, capital gain taxes
Advantage of making a lifetime gift
- Seeing money used by loved ones
- Use of annual exclusion ($18K per person, per year)
- Post gift appreciation out of estate
- Post gift income out of estate
- Shifting of income
- No gross up on taxable gifts
Define "Present Interest" for annual exclusion and recognize transfers that qualify
Questions With Correct Answers 2026 Rated A+
Real Property
Refers to land, buildings or other fixtures on land and carious rights which go along with land
and some interest in it
Personal Property
Anything that is not real property, immovability may be m moved with or by its owner
Tangible Property
Personal property that can be moved and which has physical existence
Example: Car, clothes, furniture, tools, jewelry
Intangible Property
Personal property which are not capable or being touched or seen.
Example: Stocks & bonds, ownership of debt, right to bring legal action
Present Interest
A present interest is the right to immediately use, possess, or enjoy property or income from
property.
Life Estate
When a fee simple owner grants ownership of the property to another person for the duration
of that persons life, and become the "Life Tenant"
Term of Years
Someone has the right to use and occupy a property for a specific amount of time
Fee Simple
Full ownership of real property, right to pass full ownership to someone else, whether during
the original owners lifetime or upon his death; absolute ownership
Remainder Interest
, Is an interest where the property will or may be passed to successive owner(s) at a given time or
at the occurrence of an event
Reversionary Interest
Interest where the property will or may be returned to the original owner
Differentiate what is subject to probate or avoids probate
Range of sustainable unitrust payout percentages
3-5%
Income
The return received on the use or investment
Examples: Rental income, interest earned, cash dividends from stocks, business income
Principal
Corpus of trust that is to ultimately pass to the remainder
Examples: Capital gains, insurance proceeds, stock dividends, sales proceeds, proceeds from a
domain seizure
Examples of Income Credits and Debits (e.g. "maintenance")
Income taxes, ordinary repairs or maintenance of trust property, portion of fees and expenses
Examples of Principal/Corpus/Capital Credits and Debits (e.g. "Upgrade" or "Capital
Improvement"
Portion of fees and expenses, fees for purchase/sale of asset, capital gain taxes
Advantage of making a lifetime gift
- Seeing money used by loved ones
- Use of annual exclusion ($18K per person, per year)
- Post gift appreciation out of estate
- Post gift income out of estate
- Shifting of income
- No gross up on taxable gifts
Define "Present Interest" for annual exclusion and recognize transfers that qualify
