In prior years, Lyle had made taxable
Subject: Tax of Estates, Trusts and Gifts
Questions:
- 1) In prior (pre-2011) years, Lyle had made taxable gifts (i.e., any annual exclusion(s) have been subtracted) totaling $2 mil., all of which were made to grandchildren. Accordingly, $2 mil. of Lyle's GST exemption had been allocated to these gifts. During the current year (2016), another $4 mil. of taxable gifts (i.e., annual exclusion(s) have already been subtracted) were made to Lyle's grandchildren. Lyle will allocate his remaining GST exemption to the current year gifts. Determine the GST due, if any, on Lyle's gifts in the current year.
- 2) 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 years. What is the total transfer tax (i.e., gift tax and/or GST) due with respect to these gifts?
- 3 (multiple choice) 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 no basis to the donee if the fair market value on the date of gift is less than the donor's adjusted basis. | |
c. | Has the same basis to the donee as the donor's adjusted basis if the donee disposes of the property at a gain. | |
d. | 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. |
- 4) In 2015, L made taxable gifts that totaled $7.5 mil. In 1996, L had made a taxable gift of $500,000. No gift tax was due on this previous gift, because L used $155,800 of his unified credit. Determine the gift tax liability owed by L on the $7.5 mil. taxable gift.
a. | $2,945,800 | |
b. | $3,000,000 | |
c. | $828,000 | |
d. | None of the other answers is the correct answer. | |
e. | $1,028,000 |
- 5) In many cases, a gift tax return is due even if no gift tax is payable. This is true in the following situations, except (i.e., in which case is a gift tax return not required?):
a. | A gift of $14,001 to an organization not qualifying for the gift tax charitable contribution deduction. | |
b. | A gift of a future interest worth $13 to a nephew. | |
c. | A split gift of $20,000 by parents to their child. | |
d. | None of the other answers is correct. | |
e. | A gift of a future interest to donor s spouse, actuarially valued at $2 million. |
- 6) When Father died, his will established a QTIP trust that provided income for life to Father's wife. Upon the death of Father's wife, the trust would be terminated and the property in the trust distributed to Father's children from a previous marriage. The value of the property was $6 mil. when Father died and $15 mil. 18 years later when Father's wife died and the trust was terminated. The executor of Father's estate elected to make the full QTIP election (i.e., took the marital deduction on the full $6 mil. in Father's estate). How much, if any, is included in Father's wife s gross estate when she dies?
a. | $0 | |
b. | $15 mil. | |
c. | $6 mil. | |
d. | $10.5 mil. | |
e. | $9 mil. |
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Rating:
/5
Solution: In prior years, Lyle had made taxable