Property can be transferred within the family group by gift or at death.One motivation for preferring the gift approach is:
A)To take advantage of the higher unified transfer tax credit available under the gift tax.
B)To avoid a future decline in value of the property transferred.
C)To take advantage of the per donee annual exclusion.
D)To shift income to higher bracket donees.
E)None of these.

Question

Quizplus · Accepted Answer

Choosing to transfer property within the family group by gift allows individuals to take advantage of the per donee annual exclusion, currently set at $15,000 per year per donee (in 2021). This means that an individual can gift up to $15,000 to each of their family members (e.g. children, grandchildren) without incurring any gift tax or using up their unified transfer tax credit. This is a useful strategy for transferring property over time without being subject to gift tax. The other options listed (A, B, D) are not motivations for preferring the gift approach.

Property Can Be Transferred Within the Family Group by Gift