Jack transfers property worth $250,000 to a revocable trust on January 1. Two- and- a- half years later, when the property is worth $300,000, the trust becomes irrevocable. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

When the trust became irrevocable, it is considered a new transfer of property for gift tax purposes, and the value of the property at that time (which is $300,000) is used to determine if a gift tax is due. Therefore, a $300,000 gift occurs when the trust became irrevocable.

Jack Transfers Property Worth $250,000 to a Revocable Trust on January