Reference no: EM133070299
1. Rufus, a wealthy widower, intends to gift property to his daughter, Jade, to reduce the value of his gross estate. Which property is best for Rufus to keep?
A. Stock that Rufus owns in a rapidly appreciating tech company worth $1 million.
B. Industrial condos worth $1 million that Jade intends to sell after Rufus dies.
C. Commercial property located in another state worth $1 million.
D. A $1 million life insurance policy Rufus owns on his life.
2. Lois gifted stock to her dying husband, Bradley, worth $500,000. Her basis in this stock was $200,000. Bradley's will bequeathed all of his property to Lois. Assume Bradley died two years after receiving the stock. What was the consequence of this reverse gift?
A. The stock did not receive a step-up in basis because it must be bequeathed to someone other than the decedent's spouse.
B. Lois inherited Bradley's adjusted basis in the stock.
C. Lois had to pay a gift tax when the stock was transferred to Bradley.
D. The stock received a step-up in basis at Bradley's death.
3. Marty transferred $18 million to an irrevocable trust that provides his son Jamie with unrestricted access to trust income and corpus for life. This was Marty's first taxable gift. If Marty uses his annual gift tax exclusion and all of his gift tax exemption, what is the approximate total gift amount that will be subject to gift tax?
A. $2,585,000
B. $6,285,000
C. $11,700,000
D. $6,600,000
4. Janine made the following transfers this year. Which transfer is an incomplete gift?
A. A portfolio of bonds Janine transferred to an irrevocable trust she established for her father.
B. A distribution of $20,000 made from Janine's revocable trust to her daughter Lindsay.
C. $75,000 that Janine transferred to her revocable trust.
D. A gift of the remainder interest in her beach house that she gave to her son Leo.
5. What techniques represent some tax-oriented advantages of gifting?
A. Using an annual exclusion to reduce the value of a taxable, present-interest gift.
B. All of the above.
C. Gift-splitting for a married couple to reduce the value of a taxable gift.
D. Using the unified credit to offset taxes on inter-vivos taxable gifts that do not exceed the exemption equivalent amount.
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