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Acct424 week7 - 1 Question(TCO9) Your Answer InheritanceTax...

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1. Question: (TCO 9) What is the name given to a tax levied on the right to pass property at death? Your Answer: Inheritance Tax. Succession Tax. Estate Tax. CORRECT Gift Tax. None of the above. Instructor Explanation: An inheritance tax is a tax imposed on the right to receive property from a decedent at death.  An estate  tax is imposed on the decedent’s entire estate for the right to pass property at death. Points Received: 2 of 2 2. Question:  (TCO 9) In which, if any, of the following independent situations has Ted made a gift? Your Answer: Instructor Explanation: Choice a. is not a complete transfer.  Choice b. is not a gift but is a testamentary transfer.  Payment was  not made directly to the provider of another’s medical expenses and is, therefore, a gift (choice c.).   Section 2516 treats property settlements incident to divorce as being for full and adequate consideration  (choice d.).   Points Received: 0 of 2 3. Question:
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(TCO 9) Which, if any, of the following statements  does not  reflect the current structure of the Federal  transfer tax system? Your Answer: Instructor Explanation: Under § 2035, certain gifts made within three years of death must be included in the donor-decedent’s  gross estate (choice b.).  The gift tax is cumulative as to all prior taxable gifts (choice c.).  Pre-1977  taxable gifts, although relevant for gift tax purposes, are not included in arriving at the tax base for estate  tax purposes (choice d.).  The unified transfer tax credits may be different but the tax rates are the same 
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