Question 1

Identify which of the following statements is false.

Accepted Answer

A)  A gift occurs when the owner of an insurance policy irrevocably assigns all ownership rights in the policy to another. 
B)  The value of the gift of a life insurance policy is the amount it would cost to purchase a comparable policy on the date of the gift. 
C)  The payment of premiums on an insurance policy that is owned by another does not constitute a gift. 
D)  The interpolated terminal reserve is similar to a life insurance policy's cash surrender value. 
A)  A gift occurs when the owner of an insurance policy irrevocably assigns all ownership rights in the policy to another. 
B)  The value of the gift of a life insurance policy is the amount it would cost to purchase a comparable policy on the date of the gift. 
C)  The payment of premiums on an insurance policy that is owned by another does not constitute a gift. 
D)  The interpolated terminal reserve is similar to a life insurance policy's cash surrender value.

Question 2

On July 1, Frank loans his brother Matt $200,000. The loan is evidenced by an interest- free demand note. The loan is still outstanding on December 31. The applicable interest rate is 12%. Frank is treated as having made a gift of

Accepted Answer

A)  $200,000. 
B)  $12,000. 
C)  $0. 
D)  $24,000. 
A)  $200,000. 
B)  $12,000. 
C)  $0. 
D)  $24,000.

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

A $40,000 gift occurred on Dec

Question 4

Identify which of the following statements is true.

Accepted Answer

A)  Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base. 
B)  The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death. 
C)  The gift tax is not a part of the unified transfer tax system. 
D)  All of the above are false. 
A)  Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base. 
B)  The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death. 
C)  The gift tax is not a part of the unified transfer tax system. 
D)  All of the above are false.

Question 5

Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is

Accepted Answer

A)  $0. 
B)  $1,000 gain. 
C)  $1,500 loss. 
D)  none of the above 
A)  $0. 
B)  $1,000 gain. 
C)  $1,500 loss. 
D)  none of the above

Question 6

Identify which of the following statements is false.

Accepted Answer

A)  Gift tax returns are due annually by April 15 following the year of the gift. No extensions are allowed. 
B)  Receipt of an extension of time for filing a gift tax return does not extend the due date for payment of the gift tax. 
C)  The donor pays the gift tax generally. 
D)  Gift tax returns are filed on a calendar- year basis. 
A)  Gift tax returns are due annually by April 15 following the year of the gift. No extensions are allowed. 
B)  Receipt of an extension of time for filing a gift tax return does not extend the due date for payment of the gift tax. 
C)  The donor pays the gift tax generally. 
D)  Gift tax returns are filed on a calendar- year basis.

Question 7

Gift tax returns are filed on a calendar- year basis.

Accepted Answer

A) True 
 B)False

Question 8

In October 1976, Marian made a large taxable gift. It was her first gift. Marian used her $30,000 specific exemption to reduce her taxable gift amount. What impact does this gift have on her unified credit and death tax base?

Accepted Answer

Marian's unified credit is red

Question 9

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
$16,000 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

a) Ida made gifts of $46,000 [($50,000 -

Question 10

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

Yes, a gift of one-

Question 11

The computation of the gift tax liability for a current year

Accepted Answer

A)  requires the use of different rates, depending on when the gifts were made. 
B)  requires the use of current- year tax rates only. 
C)  is made without reference to previous years. 
D)  requires knowledge of the total gift taxes paid in previous years. 
A)  requires the use of different rates, depending on when the gifts were made. 
B)  requires the use of current- year tax rates only. 
C)  is made without reference to previous years. 
D)  requires knowledge of the total gift taxes paid in previous years.

Question 12

The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.

Accepted Answer

A) True 
 B)False

Question 13

Identify which of the following statements is true.

Accepted Answer

A)  A qualified disclaimer must be made within six months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later. 
B)  An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. 
C)  One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property. 
D)  All of the above are false. 
A)  A qualified disclaimer must be made within six months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later. 
B)  An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. 
C)  One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property. 
D)  All of the above are false.

Question 14

Barbara sells a house with an FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of

Accepted Answer

A)  $50,000. 
B)  $170,000. 
C)  $0. 
D)  $120,000. 
A)  $50,000. 
B)  $170,000. 
C)  $0. 
D)  $120,000.

Question 15

Elaine loaned her brother, Mike, $175,000 to purchase a new home. Elaine does not charge Mike any interest on the loan. What are the tax consequences to Elaine and Mike?

Accepted Answer

A)  If Mike has no net investment income, Elaine does not have to treat the forgone interest as a gift. 
B)  Elaine is treated as having made a gift of the forgone interest on the $175,000 loan to Mike. 
C)  Elaine only has to impute interest on $75,000 of the loan to Mike. 
D)  Mike can deduct the interest that he is deemed to have paid Elaine. 
A)  If Mike has no net investment income, Elaine does not have to treat the forgone interest as a gift. 
B)  Elaine is treated as having made a gift of the forgone interest on the $175,000 loan to Mike. 
C)  Elaine only has to impute interest on $75,000 of the loan to Mike. 
D)  Mike can deduct the interest that he is deemed to have paid Elaine.

Question 16

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

No gift arises upon the creation of the

Question 17

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is

Accepted Answer

A)  $1,000 loss. 
B)  $1,000 gain. 
C)  $2,000 gain. 
D)  none of the above 
A)  $1,000 loss. 
B)  $1,000 gain. 
C)  $2,000 gain. 
D)  none of the above

Question 18

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

Accepted Answer

The $15,000 per donee annual exclusion a

Question 19

Calvin transfers land to a trust. His daughter Melissa will receive the income from the land for ten years. After ten years, the land is returned to Calvin. Calvin's interest is

Accepted Answer

A)  a life estate. 
B)  a reversionary interest. 
C)  a term certain. 
D)  none of the above 
A)  a life estate. 
B)  a reversionary interest. 
C)  a term certain. 
D)  none of the above

Question 20

Identify which of the following statements is false.

Accepted Answer

A)  For a transfer made in trust, each beneficiary is deemed to be a separate donee. 
B)  A trust for a minor (Sec. 2503(c) trust) must distribute all of its income currently in order to qualify for the annual exclusion. 
C)  A future interest includes reversions, remainders, and other interests, which are limited to commence in use, possession, or enjoyment at some future date or time. 
D)  The gift tax exclusion is available only for a gift of a present interest. 
A)  For a transfer made in trust, each beneficiary is deemed to be a separate donee. 
B)  A trust for a minor (Sec. 2503(c) trust) must distribute all of its income currently in order to qualify for the annual exclusion. 
C)  A future interest includes reversions, remainders, and other interests, which are limited to commence in use, possession, or enjoyment at some future date or time. 
D)  The gift tax exclusion is available only for a gift of a present interest.

Identify which of the following statements is false.

On July 1, Frank loans his brother Matt $200,000. The loan is evidenced by an interest- free demand note. The loan is still outstanding on December 31. The applicable interest rate is 12%. Frank is treated as having made a gift of

Identify which of the following statements is true.

Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is

Identify which of the following statements is false.

Gift tax returns are filed on a calendar- year basis.

In October 1976, Marian made a large taxable gift. It was her first gift. Marian used her $30,000 specific exemption to reduce her taxable gift amount. What impact does this gift have on her unified credit and death tax base?

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 $16,000 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?

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?

The computation of the gift tax liability for a current year

The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.

Identify which of the following statements is true.

Barbara sells a house with an FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of

Elaine loaned her brother, Mike, $175,000 to purchase a new home. Elaine does not charge Mike any interest on the loan. What are the tax consequences to Elaine and Mike?

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?

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is

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

Calvin transfers land to a trust. His daughter Melissa will receive the income from the land for ten years. After ten years, the land is returned to Calvin. Calvin's interest is

Identify which of the following statements is false.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters

Exam 12: The Gift Tax

Identify which of the following statements is false.

On July 1, Frank loans his brother Matt $200,000. The loan is evidenced by an interest- free demand note. The loan is still outstanding on December 31. The applicable interest rate is 12%. Frank is treated as having made a gift of

Identify which of the following statements is true.

Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is

Identify which of the following statements is false.

Gift tax returns are filed on a calendar- year basis.

In October 1976, Marian made a large taxable gift. It was her first gift. Marian used her $30,000 specific exemption to reduce her taxable gift amount. What impact does this gift have on her unified credit and death tax base?

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 $16,000 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?

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?

The computation of the gift tax liability for a current year

The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.

Identify which of the following statements is true.

Barbara sells a house with an FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of

Elaine loaned her brother, Mike, $175,000 to purchase a new home. Elaine does not charge Mike any interest on the loan. What are the tax consequences to Elaine and Mike?

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?

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is

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

Calvin transfers land to a trust. His daughter Melissa will receive the income from the land for ten years. After ten years, the land is returned to Calvin. Calvin's interest is

Identify which of the following statements is false.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

Filters