Net tax due: $2,223,800 - $2,045,800 unified credit = $178,00012.This is a generation skipping trust and is subject to the generation skipping transfer tax. The net transfer subject to the tax is $7,000,000 - $5,250,000 exemption = $1,750,000GSST = $1,750,000 x .40 = $700,000.Other Objective Questions
1. Indicate by a T if the following results in a taxable gift and an N if it does not result in a taxable gift.
_____ a. John put $50,000 of his money into a joint bank account with his son_____ b. Corky transferred ownership of a $50,000 life insurance policy with a $5,000 cash surrender value to his wife. _____ c. $600,000 placed in a grantor trust_____ d. $14,000 paid to the University of Oklahoma for a foster child’s tuition_____ e. Converting a revocable trust to an irrevocable trust_____ f. $20,000 transferred into Crummy trust with gift splitting elected._____ g. Transfer of a house valued at $500,000 held in joint tenancy to the wife according to the divorce decree_____ h. $60,000 value of a remainder interest in a trust created this year_____ i. $30,000 transferred into a minor’s trust_____ j. $100,000 diamond ring given to a fiancéTest Bank Answers:Other Objective Questions1. a. Nb. Nc. Nd. Ne. Tf. Ng. Nh. Ti. Tj. TMultiple Choice: Select the best answer for each of the following questions.
1.Which of the following does not apply to the estate tax in effect in 2013?
a. The tax is assessed on the adjusted basis of the decedent’s estate.b. Taxable gifts are integrated with the estate value to determine the estate tax.c. The gift and estate tax rate schedules are the same.d. The unified credit applies to gifts and estates.
2.Carl gave his six children gifts of $15,000 each in the current year.
3.The estate tax