ch27 - 1. Sometimes also known as transaction taxes,...

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1. Sometimes also known as transaction taxes, Federal gift and estate taxes are excise taxes. *a. True b. False 2. A lifetime transfer that is supported by full and adequate consideration is not a gift. *a. True b. False 3. One of the reasons the estate tax was enacted was to prevent the avoidance of the gift tax by the making of “deathbed gifts.” a. True *b. False 4. At one point, the tax rates applicable to transfers by gift were lower than those applying to transfers by death. *a. True b. False 5. Some states impose inheritance taxes, but the Federal tax system does not. *a. True b. False 6. An estate tax is a tax on the right of an heir to receive property on the death of the owner. a. True *b. False 7. A few states impose both an estate tax and an inheritance tax. *a. True b. False 8. In some cases, the Federal gift tax can be imposed on someone other than the donor. *a. True b. False
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9. José, a citizen and resident of Panama, makes a gift of ExxonMobil stock to his children. Because ExxonMobil is a U.S. corporation, José will be subject to the U.S. Federal gift tax. a. True *b. False 10. Kim, a resident and citizen of Korea, dies during an operation at the Mayo Clinic in Rochester (MN). Because Kim died in the U.S., he will be subject to the Federal estate tax. a. True *b. False 11. Paul, a U.S. citizen, will avoid the Federal estate tax if he becomes a Canadian resident and owns no property located in the U.S. at the time of his death. a. True *b. False 12. Becky made taxable gifts in 1974, 2010, and 2011. In computing the gift tax on the 2011 gift, she must consider all of the prior taxable gifts. *a. True b. False 13. For Federal estate tax purposes, the gross estate may include property the decedent does not own. *a. True b. False 14. For Federal estate tax purposes, the gross estate does not include property that will pass to a surviving spouse. a. True *b. False 15. For both the Federal gift and estate tax, a deduction is allowed for certain transfers to charity. *a. True b. False
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16. In the past, the amount of the unified tax credit has been the same for both transfers by gift and transfers by death. a. True *b. False 17. If the value of the gross estate is lower on the alternate valuation date than on the date of death, then the alternate valuation must be used. a. True *b. False 18. For Federal estate and gift tax purposes, the exclusion amount is the same thing as the exemption equivalent . *a. True b. False 19. Under the alternate valuation date election, each asset in the gross estate is valued at the lesser of the date of death value or six months thereafter. a. True *b. False 20. Daniel’s will provides that all of his property passes to a trust, life estate to his wife, remainder to charity. If Daniel’s executor does not make a QTIP election, the use of the alternate valuation date is possible. *a. True
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ch27 - 1. Sometimes also known as transaction taxes,...

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