Exam 12: The Gift Tax

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?

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Question 1

Correct Answer:

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a)Ida made gifts of $45,000 [($50,000 - $20,000)+ $15,000] to Mae.Ida receives an annual exclusion of $14,000.Ida's taxable gifts are $12,000.
b)Ida's taxable gift to Mae is $17,000 [($50,000 - $20,000)- $14,000] and to Jonathan is $1,000 ($15,000 - $14,000).Total taxable gifts for Ida are $17,000.

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

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Question 2

Correct Answer:

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In 1998,Delores made taxable gifts to her son of property with an FMV of $200,000.In the current year when Delores dies,the property is worth $800,000.The amount included in Delores's estate tax base because of the 1998 gift is

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Question 3

Correct Answer:

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The annual exclusion permits donors to make gifts of $14,000 each to multiple donees.

(True/False)

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Question 4

Identify which of the following statements is true.

(Multiple Choice)

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Question 5

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

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Question 6

A net gift occurs when a donor makes a gift subject to the agreement that the recipient agrees to pay the gift tax.

(True/False)

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Question 7

A husband transfers $90,000 by gift directly to his wife.The marital deduction for the transfer is

(Multiple Choice)

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Question 8

Identify which of the following statements is false.

(Multiple Choice)

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Question 9

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?

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Question 10

Jack transfers property worth $250,000 to a revocable trust on January 1.Two-and-a-half years later,when the property is worth $300,000,the trust becomes irrevocable.Which of the following statements is correct?

(Multiple Choice)

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Question 11

Which of the following transfers is subject to the gift tax?

(Multiple Choice)

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Question 12

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

(Multiple Choice)

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Question 13

Molly sells her car,valued at $30,000,to her nephew Todd for $18,000.Molly has made a taxable gift.

(True/False)

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Question 14

Identify which of the following statements is true.

(Multiple Choice)

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Question 15

Identify which of the following statements is true.

(Multiple Choice)

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Question 16

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?

(Essay)

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Question 17

Tia funds an irrevocable trust with $100,000,naming Vonda to receive income for life.Tia also grants Vonda a general power of appointment during her life.During the next year,Vonda directs the trustee to give $100,000 to Rick.Which of the following statements is not correct?

(Multiple Choice)

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Question 18

Phil transfers $50,000 to a revocable trust benefiting his son,Josh.The transfer is a taxable gift.

(True/False)

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Question 19

Identify which of the following statements is true.

(Multiple Choice)

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Question 20

Showing 1 - 20 of 105

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?

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

In 1998,Delores made taxable gifts to her son of property with an FMV of $200,000.In the current year when Delores dies,the property is worth $800,000.The amount included in Delores's estate tax base because of the 1998 gift is

The annual exclusion permits donors to make gifts of $14,000 each to multiple donees.

Identify which of the following statements is true.

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

A net gift occurs when a donor makes a gift subject to the agreement that the recipient agrees to pay the gift tax.

A husband transfers $90,000 by gift directly to his wife.The marital deduction for the transfer is

Identify which of the following statements is false.

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?

Jack transfers property worth $250,000 to a revocable trust on January 1.Two-and-a-half years later,when the property is worth $300,000,the trust becomes irrevocable.Which of the following statements is correct?

Which of the following transfers is subject to the gift tax?

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

Molly sells her car,valued at $30,000,to her nephew Todd for $18,000.Molly has made a taxable gift.

Identify which of the following statements is true.

Identify which of the following statements is true.

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?

Tia funds an irrevocable trust with $100,000,naming Vonda to receive income for life.Tia also grants Vonda a general power of appointment during her life.During the next year,Vonda directs the trustee to give $100,000 to Rick.Which of the following statements is not correct?

Phil transfers $50,000 to a revocable trust benefiting his son,Josh.The transfer is a taxable gift.

Identify which of the following statements is true.

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