Prentice Hall's Federal Taxation 2014 Corporations, 27e Chapter 12
Prentice Hall's Federal Taxation 2014 Corporations, 27e
Chapter C12 The Gift Tax
1) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.
Answer: FALSE
Page Ref.: C:12-2
Objective: 1
2) The annual exclusion permits donors to make gifts of $14,000 each to multiple donees.
Answer: TRUE
Page Ref.: C:12-4
Objective: 1
3) Molly sells her car, valued at $30,000, to her nephew Todd for $18,000. Molly has made a taxable gift.
Answer: TRUE
Page Ref.: C:12-7
Objective: 3
4) A qualified disclaimer must be made within nine months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later.
Answer: TRUE
Page Ref.: C:12-9
Objective: 3
5) Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.
Answer: FALSE
Page Ref.: C:12-10
Objective: 3
6) Mia makes a taxable gift when she makes her mother a joint owner on Mia's bank account. Mia has $25,000 in the account.
Answer: FALSE
Page Ref.: C:12-14
Objective: 3
7) The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.
Answer: FALSE
Page Ref.: C:12-14
Objective: 3
8) A net gift occurs when a donor makes a gift subject to the agreement that the recipient agrees to pay the gift tax.
Answer: TRUE
Page Ref.: C:12-15
Objective: 3
9) Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.
Answer: FALSE
Page Ref.: C:12-15
Objective: 3
10) A "Crummey demand power" in a trust document allows the donor to demand a distribution from the trust in years in which earnings exist within the trust.
Answer: FALSE
Page Ref.: C:12-17 and C:12-18
Chapter C12 The Gift Tax
1) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death.
Answer: FALSE
Page Ref.: C:12-2
Objective: 1
2) The annual exclusion permits donors to make gifts of $14,000 each to multiple donees.
Answer: TRUE
Page Ref.: C:12-4
Objective: 1
3) Molly sells her car, valued at $30,000, to her nephew Todd for $18,000. Molly has made a taxable gift.
Answer: TRUE
Page Ref.: C:12-7
Objective: 3
4) A qualified disclaimer must be made within nine months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later.
Answer: TRUE
Page Ref.: C:12-9
Objective: 3
5) Phil transfers $50,000 to a revocable trust benefiting his son, Josh. The transfer is a taxable gift.
Answer: FALSE
Page Ref.: C:12-10
Objective: 3
6) Mia makes a taxable gift when she makes her mother a joint owner on Mia's bank account. Mia has $25,000 in the account.
Answer: FALSE
Page Ref.: C:12-14
Objective: 3
7) The changing of a life insurance policy beneficiary from a spouse to an adult daughter constitutes a gift for transfer tax purposes.
Answer: FALSE
Page Ref.: C:12-14
Objective: 3
8) A net gift occurs when a donor makes a gift subject to the agreement that the recipient agrees to pay the gift tax.
Answer: TRUE
Page Ref.: C:12-15
Objective: 3
9) Mike transfers securities to an irrevocable trust and gives Rachel the power to determine who will receive the trust's income and assets. Rachel, her estate, and her creditors cannot be beneficiaries or receive the trust assets. Rachel has a general power of appointment.
Answer: FALSE
Page Ref.: C:12-15
Objective: 3
10) A "Crummey demand power" in a trust document allows the donor to demand a distribution from the trust in years in which earnings exist within the trust.
Answer: FALSE
Page Ref.: C:12-17 and C:12-18