tax chapter 25

1. [LO 1] Identify the features common to the gift tax
formula and the estate tax formula.

2. [LO 1] Explain why Congress felt it necessary to
enact a gift tax to complement the estate tax.
3. [LO 1] Describe the unified credit and the purpose
it serves in the gift and estate tax.
4. [LO 1] Fred is retired and living on his
pension. He has accumulated almost $1
million of property he would like to leave to his children. However, Fred is afraid much of his wealth
will be eliminated by the federal estate tax.
Explain whether this fear is well founded.
5. [LO 1] Define fair market value for transfer tax
purposes.
6. [LO 2] Describe the requirements for a complete
gift, and contrast a gift of a present interest with a gift of a future
interest.
7. [LO 2] Describe a property transfer or payment that
is not, by definition, a transfer for inadequate consideration.
8. [LO 2] Describe a situation in which a transfer of
cash to a trust might be considered an incomplete gift.
9. [LO 2] Identify two types of transfers for
inadequate consideration that are specifically excluded from imposition of the
gift tax.
10. [LO 2] Under what circumstances will a deposit of
cash to a bank account held in joint tenancy be considered a completed gift?
11. [LO 2] Explain how a purchase of realty could result
in a taxable gift..0pt;
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exactly”>12. [LO 2] Describe the conditions for using the annual
exclusion to offset an otherwise taxable transfer. Th13. [LO 2] List the conditions for making an election to
split gifts.14. [LO 2] Describe the limitations on the deduction of
transfers to charity. A15. [LO 2] Explain the purpose of adding prior taxable
gifts to current taxable gifts and show whether these prior gifts could be
taxed multiple times over the years.
16. [LO 3] Explain why the gross estate includes the
value of certain property transferred by the decedent at death, such as
property held in joint tenancy with the right of survivorship, even though this
property is not subject to probate.