Classify each of the following statements.
-Homer purchases a U.S. savings bond listing title as: "Homer, payable to Bernice upon Homer's death." Bernice is Homer's sister.

Question

Quizplus · Accepted Answer

When Homer purchases a U.S. savings bond and lists it as "Homer, payable to Bernice upon Homer's death," no taxable transfer occurs immediately. The transfer of ownership will only occur upon Homer's death, and at that point, it may be subject to estate tax, not gift tax, depending on the value of Homer's estate and the tax laws in effect at the time of his death. However, the statement does not directly involve estate tax applicability at the time of purchase.

Classify Each of the Following Statements