Question 1

Karen purchased a beach house for $300,000 and immediately titled it in the names of Karen and Kenny,as joint tenants with right of survivorship.Karen and Kenny are not married.Did a gift occur? If so,for what amount?

Accepted Answer

The answer of Karen purchased a beach house for $300,000...

Question 2

On September 1,George transfers his entire ownership rights in a $250,000 life insurance policy on his own life to his sister,Sally.The policy's interpolated terminal reserve is $30,000 as of September 1.On July 1,George had paid the policy's $6,000 annual premium.What are the gift tax consequences,if any?

Accepted Answer

The answer of On September 1,George transfers his entire ownership...

Question 3

On March 1,Bruce transfers $300,000 to a revocable trust with Sprint Bank as trustee.The trustee must pay out all the income to Sam during Sam's lifetime.At Sam's death,the property is to be paid to Sam Jr.On December 31,the trustee distributes $40,000 of income to Sam.What date did a gift occur? What was the amount of the gift?

Accepted Answer

The answer of On March 1,Bruce transfers $300,000 to a...

Question 4

In 2013,Lilly makes taxable gifts aggregating $5.25 million.Her only other taxable gifts amount to $1 million,all of which were made in 1998.What is her gift tax liability?

Accepted Answer

The answer of In 2013,Lilly makes taxable gifts aggregating $5.25...

Question 5

Contrast the Crummey trust with the Sec.2503(c)trust.

Accepted Answer

The answer of Contrast the Crummey trust with the Sec.2503(c)trust....

Question 6

Yuli wants to help his adult grandson,Jerry,become a CPA.He pays all of Jerry's tuition this year,which totals $20,000.He also pays $9,000 for Jerry's room and board at school.Yuli makes the payments directly to the school.What are the gift tax consequences?

Accepted Answer

The answer of Yuli wants to help his adult grandson,Jerry,become...

Question 7

On June 1,Sherri deposits $60,000 into a new joint bank account in the names of Sherri and John.Her friend John makes no deposits.On December 15th,John withdraws $25,000 from the joint account.What are the gift tax consequences,if any?

Accepted Answer

The answer of On June 1,Sherri deposits $60,000 into a...

Question 8

Discuss at least two reasons for making inter vivos (lifetime)gifts.

Accepted Answer

The answer of Discuss at least two reasons for making...

Question 9

Discuss the negative aspects of gifts.

Accepted Answer

The answer of Discuss the negative aspects of gifts....

Question 10

In the current year,Martha makes the transfers below to her husband,Ryan.What is the amount,if any,of her marital deduction?
a)In August,she gives him a house valued at $250,000.
b)In December,she gives him a 15-year income interest in a trust with the bank name as trustee.She names her son as the remainderman.The trust is irrevocable and is funded with $500,000 of assets,and 8% is the applicable interest rate.

Accepted Answer

The answer of In the current year,Martha makes the transfers...

Question 11

Abby transfers $10,000 to a political organization to promote her favorite candidate for president.Does Abby's transfer qualify as a gift?

Accepted Answer

The answer of Abby transfers $10,000 to a political organization...

Question 12

Bryce pays $10,000 for his adult grandson's tuition at medical school and $8,000 for the grandson's room and board in the medical school's dormitory.All payments are made directly to the medical school.Do these payments by Bryce qualify as gifts?

Accepted Answer

The answer of Bryce pays $10,000 for his adult grandson's...

Question 13

Discuss the statutory exemptions from the gift tax.

Accepted Answer

The answer of Discuss the statutory exemptions from the gift...

Question 14

Ward and June decide to divorce after 30 years of marriage.Ward transfers $500,000 to June in settlement of her property rights.What are the gift tax consequences of this transfer?

Accepted Answer

The answer of Ward and June decide to divorce after...

Question 15

Ida sells some stock to Mae for $20,000 at a time when the stock is valued at $50,000.Later in the year,she gives Mae $15,000 in cash.
a)What is the amount of Ida's taxable gifts?
b)How would your answer to Part (a)change if Ida gave the cash to Jonathan instead of to Mae?

Accepted Answer

The answer of Ida sells some stock to Mae for...

Question 16

What is a "net gift" and what is the potential income tax problem associated with making a net gift?

Accepted Answer

The answer of What is a "net gift" and what...

Question 17

Discuss the purpose of the gift tax annual exclusion.

Accepted Answer

The answer of Discuss the purpose of the gift tax...

Question 18

On September 1,George transfers his entire ownership rights in a $250,000 life insurance policy on his own life to his sister,Sally.The policy's interpolated terminal reserve is $30,000 as of September 1.On July 1,George had paid the policy's $6,000 annual premium.On July 1 of the subsequent year,George again paid the premium on the policy.What are the gift tax consequences in the subsequent year,if any?

Accepted Answer

The answer of On September 1,George transfers his entire ownership...

Question 19

What are the requirements for classifying a transaction as a transfer of a qualified terminable interest property (QTIP)?

Accepted Answer

The answer of What are the requirements for classifying a...

Question 20

Donna transfers $200,000 of property to an irrevocable trust with a bank as trustee.Donna names Toby (age 60)to receive all of the trust income for the rest of his life.At Toby's death,the property is to pass to Al or Al's estate.What kind of interest do Toby and Al possess?

Accepted Answer

The answer of Donna transfers $200,000 of property to an...

Quiz 23: The Gift Tax

Karen purchased a beach house for $300,000 and immediately titled it in the names of Karen and Kenny,as joint tenants with right of survivorship.Karen and Kenny are not married.Did a gift occur? If so,for what amount?

In 2013,Lilly makes taxable gifts aggregating $5.25 million.Her only other taxable gifts amount to $1 million,all of which were made in 1998.What is her gift tax liability?

Contrast the Crummey trust with the Sec.2503(c)trust.

Yuli wants to help his adult grandson,Jerry,become a CPA.He pays all of Jerry's tuition this year,which totals $20,000.He also pays $9,000 for Jerry's room and board at school.Yuli makes the payments directly to the school.What are the gift tax consequences?

On June 1,Sherri deposits $60,000 into a new joint bank account in the names of Sherri and John.Her friend John makes no deposits.On December 15th,John withdraws $25,000 from the joint account.What are the gift tax consequences,if any?

Discuss at least two reasons for making inter vivos (lifetime)gifts.

Discuss the negative aspects of gifts.

Abby transfers $10,000 to a political organization to promote her favorite candidate for president.Does Abby's transfer qualify as a gift?

Bryce pays $10,000 for his adult grandson's tuition at medical school and $8,000 for the grandson's room and board in the medical school's dormitory.All payments are made directly to the medical school.Do these payments by Bryce qualify as gifts?

Discuss the statutory exemptions from the gift tax.

Ward and June decide to divorce after 30 years of marriage.Ward transfers $500,000 to June in settlement of her property rights.What are the gift tax consequences of this transfer?

Ida sells some stock to Mae for $20,000 at a time when the stock is valued at $50,000.Later in the year,she gives Mae $15,000 in cash. a)What is the amount of Ida's taxable gifts? b)How would your answer to Part (a)change if Ida gave the cash to Jonathan instead of to Mae?

What is a "net gift" and what is the potential income tax problem associated with making a net gift?

Discuss the purpose of the gift tax annual exclusion.

What are the requirements for classifying a transaction as a transfer of a qualified terminable interest property (QTIP)?

Donna transfers $200,000 of property to an irrevocable trust with a bank as trustee.Donna names Toby (age 60)to receive all of the trust income for the rest of his life.At Toby's death,the property is to pass to Al or Al's estate.What kind of interest do Toby and Al possess?