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
A) $50,000.
B) $170,000.
C) $120,000.
D) $0.
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
A) $200,000.
B) $24,000.
C) $12,000.
D) $0.
Which of the following situations requires that a gift tax return be filed?
A) George gives wife, Laura, a new car for her birthday.
B) Yanisha makes gifts of $3,000 of present interest property to each of her nieces and nephews.
C) Archie pays the hospital medical bills for his friend Paige.
D) Ida purchases a beach home, listing Mark as a joint tenant. Mark provides no consideration for the home.
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
A) $0.
B) $189,000.
C) $200,000.
D) $800,000.
Damitria transfers her rights in a $100,000 insurance policy on June 1 to Tremayne. The policy has a cash value of $9,000 and an interpolated terminal reserve of $8,500. The annual policy premium of $12,000 had been paid on January 1. Damitria’s gift (before the annual gift tax exclusion) to Tremayne is
A) $8,500.
B) $9,000.
C) $15,500.
D) $20,500.
Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Calvin’s interest is
A) a remainder interest.
B) a life estate.
C) a reversionary interest.
D) a term certain.
Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Melissa’s interest is
A) a remainder interest.
B) a life estate.
C) a reversionary interest.
D) a term certain.
A Crummey trust
A) provides the donor with the ability to retrieve the property.
B) prohibits the beneficiary from withdrawing assets.
C) allows the donor an annual exclusion for transfers.
D) receives property that is not eligible for the annual exclusion.
A split-interest gift transfer
A) involves two public (charitable) organizations.
B) involves two present interests.
C) qualifies for a charitable contribution deduction if the recipient charity receives a guaranteed annuity, which is a present interest.
D) cannot qualify for a deduction if a future interest is given to a charitable organization.
The computation of the gift tax liability for a current year
A) is made without reference to previous years.
B) requires the use of current-year tax rates only.
C) requires the use of different rates, depending on when the gifts were made.
D) requires knowledge of the total gift taxes paid in previous years.
In 2009, Letty makes taxable gifts totaling $4 million. Her only other taxable gifts amount to $1 million, all of which were made in 1986. What is Letty’s 2008 gift tax liability before the unified credit?
A) $2,220,800
B) $1,875,000
C) $1,840,800
D) $1,785,000
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?
A) Elaine is treated as having made a gift of the forgone interest on the $175,000 loan to Mike.
B) Elaine only has to impute interest on $75,000 of the loan to Mike.
C) If Mike has no net investment income, Elaine does not have to treat the forgone interest as a gift.
D) Mike can deduct the interest that he is deemed to have paid Elaine.
Roger makes a $1,000,000 cash gift on January 1 of the current year, and dies on February 1 of the current year. Roger’s gift tax return is due
A) April 15 of the current year.
B) December 31 of the current year.
C) April 15 of the next year.
D) nine months after his date of death.
In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post-1976 transfers is reduced by
A) $0.
B) $6,000.
C) $15,000.
D) $30,000.
Gordon died on January 1 and by his will left land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky disclaims the property on December 31 of the year of death, when the land was still worth $100,000. Becky has made a gift (before the annual gift tax exclusion) of
A) $100,000.
B) $60,000.
C) $50,000.
D) $0.
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