Gift property (disregarding any adjustment for gift tax paid by the donor): a. Has no basis to...
Question:
Gift property (disregarding any adjustment for gift tax paid by the donor):
a. Has no basis to the donee because he or she did not pay anything for the property.
b. Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain.
c. Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a loss, and the fair market value on the date of gift was less than the donor's adjusted basis.
d. Has no basis to the donee if the fair market value on the date of gift is less than the donor's adjusted basis.
e. None of the above.
Gift Tax:
The gift tax is a tax paid by the donor of certain gifts that would have otherwise been taxable as estate tax when transferred at death. The recipient of a gift does not have to pay gift tax or report income on the receipt of a gift, which is also true of a recipient of inheritance.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerIf a donee disposes of gifted property at a gain, the donee's basis in the gifted property is the same as the donor's adjusted basis in the property...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Estate Planning: Taxes, Trusts & Gifts
from
Chapter 10 / Lesson 9
7.5K
Estate planning is the process of making a plan for asset distribution after death. Explore the taxes, trusts, and gifts involved in estate planning and learn about assets, wills, and beneficiaries.
Related to this Question
- Gift property (disregard any adjustment for gift tax paid by the donor): a. Has no basis to the donee because he or she did not pay anything for the property. b. Has the same basis to the donee as t
- Gifts or bequests of specific sums of money or of specific property will distributed income tax free to the beneficiary if: a. the fiduciary so elects on the Form 1041 for the estate or trust. b. they can be paid or distributed only from the income of an
- The maximum amount that an individual can give another in a year without being subject to estate taxes is: A) All gifts are taxable. B) No gifts are taxable. C) $10,000. D) $5,000. E) $15,000
- D created an irrevocable trust with income to A for life, remainder to B, or B's estate. D retained the power to give income to D with A's approval. What are the gift tax consequences? A. The gift of the income interest is complete. The gift of the remain
- On the advice of her estate planner, Grace made taxable gifts of $5 million in 2011. Grace died in late 2013 leaving a taxable estate of $1.1 million. Grace never made any taxable gifts before 2011. Determine her estate tax liability.
- During the current year, Tom sells a tract of land for $850,000. The property was received as a gift from Janell on March 10, 1995, when the property had a $300,000 FMV. The taxable gift was $290,000 because the annual exclusion was $10,000 in 1995. Janel
- Which of the following is not an advantage of lifetime gifts? a. The annual exclusion can shield thousands of dollars from taxation. b. Property appreciation does not enter the estate tax calculation. c. A stepped-up basis is secured for appreciated gifts
- What is the gift tax? Identify two types of transfers (for inadequate consideration) that are specifically excluded from the imposition of the gift tax.
- The estate and gift taxes share several common features. Which of the following characteristics is common to both the estate and gift taxes? a. A charitable deduction and an annual exclusion. b. None of the choices are correct. c. The tax rate schedule
- Prior to a charitable gift to the Plato University of land with a basis of $6,000 and a value of $13,000, All-Set, Inc. had a taxable income of $50,000. If the dividends-received deduction was $80,000, what is the charitable contribution deduction?
- On the advice of her estate planner, Grace made taxable gifts of $5,000,000 in 2011. Grace dies in late 2013 leaving a taxable estate of $1,100,000. Grace never made any taxable gifts before 2011. Wha
- For tax year 2013, the standard personal exemption amount was $3900 per person. Kate is single and a homeowner. In 2013, she has property taxes on her home of $3,000, makes charitable contributions of $2,000, and pays home mortgage interest of $7,000. Kat
- Using property she inherited, Myrna makes a gift of $6.2 million to her adult daughter, Doris. The gift takes place in 2011. Neither Myrna nor her husband, Greg, has made any prior taxable gifts. Determine the gift tax liability if: a. The 2513 election
- Using property she inherited, Myrna makes a gift of $6.2 million to her adult daughter, Doris. The gift takes place in 2011. Neither Myrna nor her husband, Greg, have made any prior taxable gifts. Determine the gift tax liability if: a. The 2513 election
- Using property she inherited, Myrna makes a gift of $6.2 million to her adult daughter, Doris. The gift takes place in 2013. Neither Myrna nor her husband, Greg, have made any prior taxable gifts. Determine the gift tax liability if: A) The 2513 election
- Prior to a charitable gift to the Plato University of land with a basis of $6,000 and a value of $13,000, All-Set, Inc. had taxable income of $50,000. If the dividends-received deduction was $80,000, the charitable contribution deduction is: a. $5,000 b
- The excess of the depletion deduction allowable under 611 over the adjusted basis of the property at the end of the tax year (determined without regard to the depletion deduction for the tax year) is an item of tax preference. a. Should a taxpayer inclu
- The Pierce Trust incurred the following items during the year. Taxable interest received $300,000 Tax-exempt interest received 200,000 Charitable gift paid 60,000 Tax preparation fees paid 6,000 What
- A qualified revocable trust: a. is limited to a calendar income tax year. b. must be distributed 100% to a charitable beneficiary upon the death of the grantor. c. can be treated as an estate with respect to income tax return filing if the proper election
- Take a position on the fairness of the current estate tax laws and recommend changes you would propose to the law to make estate taxes fairer and/or a rationale for eliminating gift taxes.
- Greg, who is subject to a 35 percent marginal gift tax rate, made a gift of a sculpture to Karen, valuing the property at $80,000. The IRS later valued the gift at $150,000. Compute the applicable undervaluation penalty.
- Explain the exemption for educational or medical expenses, the marital deduction and the charitable contribution deduction for gifts.
- In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. What is her taxable income? (a) $19,450 (b) $23,500 (c) $32,000 (d) $25,700
- What criteria must be met for personal property taxes to qualify as an itemized deduction?
- Not-for-profit organizations obtain their revenues primarily from: a) Contributions from donors b) Sales to customers c) Taxes on real property d) Taxes on personal property
- D, a U.S citizen who made no inter vivos gifts, died in the current year, leaving a gross estate of $5 million. A) Will D's executor be required to file a federal estate tax return? B) Under what ch
- The estate and gift taxes share several common features. Which of the following characteristics are common to both the estate and gift taxes? A. A marital deduction and a deduction for casualty losses. B. The tax rate schedule for calculating gross tran
- T, who never married nor made any prior inter vivos gifts, made taxable gifts for $6 million in 2013. T dies in the current year, leaving a taxable estate of $5 million. In 2002, G created a trust, th
- Which of the following is true of property taxes? a. Property taxes are not deductible by the trust or estate if imposed on personal property. b. Property taxes are deducted in computing the trust or estate's adjusted gross income. c. Property taxes ma
- Which of the following taxes will NOT qualify as an itemized deduction? a. personal property taxes assessed on the value of specific property b. state, local, and foreign income taxes c. real estate taxes on a residence d. gasoline taxes on a personal
- The estate and gift taxes share several common features. Which of the following characteristics are common to both the estate and gift taxes? a) A marital deduction and a deduction for casualty losses. b) The tax rate schedule for calculating gross transf
- The federal estate tax is: a. a tax on the right of a decedent to transfer property. b. a tax on the right of a beneficiary to inherit property. c. a tax levied only on a decedent's probate property. d. an excise tax levied on the privilege of accumulati
- Kendra made taxable gifts of cash equal to $350,000 in 1975, $400,000 in 1977, and $150,000 early in 2008. Kendra dies late in 2012 leaving a taxable estate of $600,000. In applying the unified tax rate schedules (for estate tax purposes), the executor mu
- In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. Joan's adjusted gross income is $32,000. What is her taxable income? a. $19,450 b. $23
- Remsco has taxable income of $60,000 and a charitable contribution limit modified taxable income of $72,000. Its charitable contributions for the year were $7,500. What is Remsco's current-year charitable contribution deduction and contribution carryover?
- Remsco has taxable income of $79,000 and a charitable contribution limit modified taxable income of $81,500. Its charitable contributions for the year were $8,260. What is Remsco's current-year charitable contribution deduction and contribution carryover?
- During 2015, Lavoy made taxable gifts (i.e., any annual exclusion(s) have been subtracted) totaling $7 mil., all of which were made to grandchildren. Lavoy's children were still alive when these gifts were made. No taxable gifts had been made in any prior
- A pro-rata portion of estate/trust deductions: a. need not be allocated to tax exempt income. b. is allocated to tax exempt income to the extent any amount of the deductions remains after allocation to taxable income. c. must be allocated to tax exempt in
- In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. Joan's adjusted gross income is $32,000. What is her taxable income? a. $19,450 b. $23,5
- Tendai has AGI of $70,000 and has made the following payments: State income tax withholding 2,200 State sales tax paid 2,100 Federal income tax withholding 8,000 Social security tax withheld from wages 5,600 State gift tax 6,000 Town real estate tax 9,000
- Assume no prior taxable gifts by D. In 2015, D makes taxable gifts aggregating $100,000 (net of the annual exclusion) to A. In 2016, D makes a taxable gift of $250,000 (net of the annual exclusion) to B. What is the gift tax liability in 2016? A. $0 B. $2
- Which of the following statements concerning federal gift and estate taxes is (are) correct? I. The donor s gross estate includes the amount of any gift taxes paid by the donor on gifts made within 3 years of death. II. Gifts made within 3 years of deat
- Concerning the federal tax on generation-skipping transfers: a) The tax applies in addition to any applicable gift or estate tax. b) The tax applies in lieu of any applicable gift or estate tax. c) The tax is applied at a flat 33 percent tax rate. d) The
- After being diagnosed with a terminal illness, Jude (a widower) makes gifts of all of his assets (over $6 million in value) to family members and dies shortly thereafter. Based on these facts, would the donor-imposed gift tax or estate tax be avoided bec
- During 2011, Sam paid the following taxes: Property taxes on residence (paid from escrow account) = $1,550 Property tax portion of car registration (based on value) = $400 Property taxes on land held for long-term appreciation = $350 What amount can Sam d
- In 2018, Mr. Ito, an unmarried individual, made a gift of real estate to his son. Compute the amount subject to federal gift tax if the FMV of the real estate was $15 million, and the transfer was Mr.
- Which of the following statements concerning federal gift and estate taxes is (are) correct? I. The donor's gross estate includes the amount of any gift taxes paid by the donor on gifts made within 3 years of death. II. Gifts made within 3 years of death
- Depositing a gift from a family member is regarded as: a. revenue b. capital c. reverse expense d. liablity
- AI is single, age 60, and has gross income of $140,000. His deductibles are as follows: Alimony-divorce took place in 2005 $20,000 Charitable contributions 4,000 Contribution to a traditional IRA 5,500 Expenses paid on rental property 7,500 Interest on h
- Which of the following itemized deductions is not subject to the limitation on itemized deductions for high income taxpayer? a. Home mortgage interest b. Investment interest expense c. Miscellaneous itemized deductions d. State income and real estate
- Determine the items exempt from gift tax that were paid by Yancey: 1. College expenses for his son paid directly to the institution Tuition = $20,000 Room and Board = $10,000 2. Transfer to Throw Th
- Which is not a source of federal revenue? a. Employment taxes. b. Estate and gift taxes. c. Sales tax. d. Income taxes and individuals.
- Home ownership is an area of the tax law where a taxpayer can really benefit by owning a home or renting a home. Discuss at least one tax-related advantage of home ownership.
- The amount elected to be treated as a prior year distribution under IRC Section 663(b): a. Should normally be zero since trusts and estates have more favorable tax brackets than do individuals. b. Is limited to amounts actually paid or credited during t
- Mark and Patricia report adjusted gross income of $380,500 and itemized deductions of $64,000 for the interest on their home acquisition mortgage (principal amount of $890,000), taxes, and charitable contributions. They file a joint income tax return and
- Prepare adjusting entries for the following items. Omit explanations. a. Unrecorded interest on savings bonds is $680. b. Property taxes incurred but not paid or recorded amount to $540. c. Legal fees of $5,000 were collected in advance. By year end, 6
- Elizabeth made taxable gifts of $3,850,000 in 2019 and $5,005,000 in 2020. She paid no gift tax on the 2019 transfer. On what amount is the Federal gift tax computed for the 2020 gift?
- Basically, the Estate tax and the Gift tax are a combined system, and are linked together. The question is why? Why does the tax law set up a "unified" system that combines gifts with the estate and h
- Mark and Patricia report adjusted gross income of $410,000 and itemized deductions of $31,000 for the interest on their home acquisition mortgage (principal amount of $890,000 acquired in 2015), $14,000 in state and local taxes, and $38,000 in charitable
- Individuals who own homes may take a tax deduction for interest paid. Many individuals believe that this tax law discriminates against individuals who rent. Do you think this deduction is discriminato
- S1 died in December of 2013 when the exemption amount for the estate tax was $5,250,000 mil. At his death, S1 owned property worth $10.5 mil. During his lifetime, S1 did not make any taxable gifts. At
- For all of 2015 Dongmei (a calendar year taxpayer) allowed the Salvation Anny to use a building, she owns rent-free. The building normally rents for $24,000 a year. Dongmei will "not" be allowed a Charitable Contribution deduction for 2015 of $24,000. a.
- Tax that you pay when making a profit from selling a house is an example of: a. Property Tax b. Sales Tax c. Capital Gains Tax d. Income Tax
- Should taxpayers and or beneficiaries owe inheritance tax and gift taxes? What tax law governs these regulations?
- Which of the following items will be an addition to AMTI in arriving at ACE? a. Tax-exempt income b. Federal income tax c. Excess charitable contributions d. None of the above
- The net operating loss deduction: a. cannot exceed 20% of the estate's or trusts DNI. b. pass through can be used by a beneficiary regardless of the beneficiary's itemization of deductions. c. is deductible only on an estate's federal estate tax return. d
- Which of the following transactions does not constitute a completed gift for federal gift tax purposes? a. An outright gift of $100,000 to a United States citizen spouse. b. A gratuitous transfer of
- Trade and business expenses should be treated as: a. a deduction from AGI subject to the 2%-of-AGI floor. b. a deduction from AGI not subject to the 2%-of-AGI floor. c. deductible for AGI. d. an itemized deduction if not reimbursed. e. none of the above
- Trust and estate distributions to charities, if otherwise allowable, can be deducted on the trust's or estate's 1041 a. but are limited to 30% of adjusted taxable income. b. but are limited to 50% of adjusted gross income. c. but are limited to 80% of
- In 2012, Rebecca made a gift of stock (basis of $203,000 and fair market value of $263,000) to her son, Daniel. As a result of the gift, Rebecca paid a gift tax of $75,000. Daniel's income tax basis for gain is: a) $278,000. b) $203,000. c) $221,000. d)
- If a relative dies, and you receive a parcel of land and life insurance proceeds, are those two things taxable?
- ParentCo's separate taxable income was $350,000, and SubCo's was $225,000. Consolidated taxable income before contributions was $400,000. Charitable contributions made by the affiliated group included $15,000 by ParentCo and $20,000 by SubCo. Compute the
- 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?
- All of the following are for AGI deductions except: A. Contributions to qualified retirement accounts B. Rental and royalty expenses. C. Charitable contributions. D. Business expenses for a self-employed taxpayer.
- In 2015, Nadia has $100,000 ot regular taxable income. She itemizes her deductions as follows: real property taxes of $1,500, state income taxes of $2,000, and mortgage interest expense of $10,000 (no
- The maximum deduction for a charitable bequest is what percentage of a residuary estate?
- All of the following are deductions from the gross estate except: a. the decedent's funeral expenses. b. charitable bequests. c. the annual exclusion. d. a credit card bill of the decedent's. e. property bequeathed to the surviving spouse.
- In 2018, Deon and Nene's are married filing jointly. Deon and Nene's taxable income is $1,090,000, and they itemize their deductions as follows: real property taxes of $10,000, charitable contributions of $30,000, and mortgage interest expense of $40,000
- Attorney's fees: a. can only be deducted on the Form 1041 to the extent they exceed 2% of adjusted gross estate or trust income. b. can only be deducted on an estate's federal estate tax return if an estate tax return is required. If no federal estate t
- Jill Ward sells real estate to her son Mike through the use of a 20-year installment note. What are the gift, estate and income tax consequences associated with such a sale? What happens if Jill die
- 18. Which of the following is incorrect? |a. Alimony is a deduction /or AGL |b. The expenses associated with royalty property are a deduction /rom AGL |c. Contributions to a traditional IRA are a d
- Sylvester files as a single taxpayer during 2016 and claims one personal exemption. He itemizes deductions for regular tax purposes. He paid charitable contributions of $7,700, real estate taxes of $1,100, state income taxes of $6,450, and interest on a h
- Sylvester files as a single taxpayer during 2015 and claims one personal exemption. He itemizes deductions for regular tax purposes. He paid charitable contributions of $7,000, real estate taxes of $1,000, state income taxes of $4,000, and interest on a h
- In 2019, Sven is single and has $120,000 of regular taxable income. He itemizes his deductions as follows: real property tax of $2,000, state income tax of $4,000, and mortgage interest expense of $15,000 (acquisition debt of $300,000). He also has a posi
- Vera and Jake, a married couple with an AGI of $321,000 for 2011, have $20,000 of mortgage interest, $8,000 of unreimbursed medical expenses, $4,000 of property taxes, and $9,000 of charitable contributions. How much may they claim for itemized deductions
- Winnie purchases and places in service in 2016 personal property costing $2,031,000. The property does not qualify for bonus depreciation. What is the maximum Sec. 179 deduction that Winnie can deduct, ignoring any taxable income limitation? A. $479,000 B
- In 2011, Sven is single and has $167,000 of regular taxable income. He itemizes his deductions as follows: real property tax of $3,000, state income tax of $3,800, mortgage interest expense of $16,550 (not a home-
- The county collector of Suncoast County is responsible for collecting all property taxes levied by funds and governments within the boundaries of the county. To reimburse the county for estimated admi
- Sam, a single individual with a salary of $40,000, paid the following expenses during the year: Alimony: $8,000 Charitable contributions: $2,000 Casualty loss (after $100 floor): $1,000 Mortgage interest on personal residence: $3,000 Moving expenses:
- Would any of the following items be deductible on an individual's income tax return? If so, would the item be deductible for or from AGI? Explain each item. (a) Hobby expenditures of $3,000 in excess of hobby gross income (b) $3,000 loss on the sale of
- What is the maximum gift and estate tax rate?
- Cal reported the following itemized deductions on his 2011 tax return his AGI for 2011 was 85,000 the mortgage interest is all qualified mortgage interest to purchase his personal residence for AMT compute his total itemized deductions. Medical expenses
- Ledford County levied property taxes of $10,000,000, 2% of which is expected to be uncollectible. Prior to this new levy, the county still had $350,000 of uncollected taxes from previous years. How much should be reported as Taxes Receivable after the new
- Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2015: Income: Salary $80,000 Business Income 25,000 Interest income from bonds 10,000 Tax-exempt bo
- Which of the following is true of depreciation for an estate? A. It is allocated between the trust and beneficiaries based on the income allocated to each B. It is allocated entirely to the estate for tax purposes C. It is allocated entirely to the ben
- The City of Sunrise levied property taxes in 2016 in the amount of $10 million. It is estimated that 1% will be uncollectible. During 2016, $8,500,000 was collected, and it is anticipated and recognized that $400,000 will be collected during the next 60 d
- An installment sale of property is classified as a: a) Deferred Tax Asset b) Deferred Tax Liability
- Real estate taxes may be deductible to the extent that they accrued:
- In 2018, Deon and NeNe are married, filing jointly. Deon and NeNe's taxableincome is $1,090,000, and they itemize their deductions as follows: real property taxes of $10,000, charitable contributions
- In its first tax year, the Wittmann Estate generated $50,000 of taxable interest income and $20,000 of tax-exempt interest income. It paid fiduciary fees of $7,000. The estate is subject to a 45% marginal estate tax rate and a 40% marginal income tax rate
Explore our homework questions and answers library
Browse
by subject