Exam (elaborations)
C12+ (Questions With Complete Solutions)
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C12+ (Questions With Complete Solutions)
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C12+ (Questions With Complete Solutions)The gift tax is a wealth transfer tax that applies to transfers during a person's
lifetime and transfers at death. Right Ans - FALSE
The annual exclusion permits donors to make gifts of $13,000 each to multiple
donees. Right Ans - TRUE
Molly sells her car, valued at $30,000, to her nephew Todd for $18,000. Molly
has made a taxable gift. Right Ans - TRUE
A qualified disclaimer must be made within nine months after (a) the day the
property is transferred, or (b) the day the person receiving the property
becomes age 21, whichever is later. Right Ans - TRUE
Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The
transfer is a taxable gift. Right Ans - FALSE
Mia makes a taxable gift when she makes her mother a joint owner on Mia's
bank account. Mia has $25,000 in the account. Right Ans - FALSE
The changing of a life insurance policy beneficiary from a spouse to an adult
daughter constitutes a gift for transfer tax purposes. Right Ans - FALSE
A net gift occurs when a donor makes a gift subject to the agreement that the
recipient agrees to pay the gift tax. Right Ans - TRUE
Mike transfers securities to an irrevocable trust and gives Rachel the power to
determine who will receive the trust's income and assets. Rachel, her estate,
and her creditors cannot be beneficiaries or receive the trust assets. Rachel
has a general power of appointment. Right Ans - FALSE
A "Crummey demand power" in a trust document allows the donor to demand
a distribution from the trust in years in which earnings exist within the trust.
Right Ans - FALSE
Gift tax returns are filed on a calendar-year basis. Right Ans - TRUE
, The purchase of a $15,000 engagement ring generates a taxable gift
necessitating the filing of a gift tax return. Right Ans - TRUE
Identify which of the following statements is true. Right Ans - C) Under the
unified transfer tax system, taxable gifts made after 1976 are included in the
donor's death tax base.
In 1998, Delores made taxable gifts to her son of property with an FMV of
$200,000. In the current year when Delores dies, the property is worth
$800,000. The amount included in Delores's estate tax base because of the
1998 gift is Right Ans - C) $200,000.
In the current year, Cesar, who is single, gives $26,000 to each of his 20 nieces
and nephews for a total property transfer of $520,000. Cesar's taxable gifts
total Right Ans - D) $220,000.
Identify which of the following statements is true. Right Ans - C) For
transfer tax purposes, both the charitable contribution deduction and the
marital deduction are unlimited.
In November 1976, Grant uses $30,000 of the specific exemption available at
that time. The unified credit available to Grant for post-1976 transfers is
reduced by Right Ans - B) $6,000.
Barbara sells a house with an FMV of $170,000 to her daughter for $120,000.
From this transaction, Barbara is deemed to have made a gift, before the
annual exclusion, of Right Ans - A) $50,000.
In the current year, Bonnie, who is single, sells stock valued at $60,000 to
Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash.
Bonnie's taxable gifts from these transfers total Right Ans - C) $57,000.
Identify which of the following statements is true. Right Ans - B) An
individual can inadvertently make a gift by underestimating a property's fair
market value and selling it to a relative for a price below its fair market value.
Vincent makes the following property transfers in the current year:
∙ $5,000 tuition for a grandson paid directly to the school
∙ $1,000 medical expense for a child paid directly to a hospital
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