Classify each of the following statements.
-Using his own funds, Horace establishes a savings account designating ownership as follows: "Horace and Nadine as joint tenants with right of survivorship." Horace later withdraws all of the funds.
A)No taxable transfer occurs.
B)Gift tax applies.
C)Estate tax applies.

Question

Quizplus · Accepted Answer

When Horace establishes a savings account with Nadine as joint tenants with right of survivorship using his own funds and later withdraws all the funds, no taxable transfer occurs because the funds remain under his control and ownership. The designation of joint tenancy with right of survivorship does not constitute a completed gift for tax purposes until Horace's death or unless Nadine withdraws funds.

Classify Each of the Following Statements