Question

Which of the following statements are true for both gratuitous and testamentary transfers?

A). A unified credit of up to $1 million reduces the tax on any transfer?

B). An annual exclusion offsets any transfer up to $13,000.

C). An election can be made to spilt a transfer between spouses.

D). A charitable and marital deduction is allowed in computing the taxable transfers.

Answer 1

A. A unified credit of up to $1 million reduces the tax on any transfer

The unified gift of $11000 is exemp from the tax so  unified credit of up to $1 million will be taxable.so option a is not correct answer.

B. An annual exclusion offsets any transfer up to $13,000

the annual exclusion will be added to the other persons income fully so option B is also not correct.

C. An election can be made to spilt a transfer between spouses

spouses can make an election to gift split so that each gift during a tax year is treated as made one-half by each spouse. ... The end result is the same, but no gift tax return would be required. so option C is not correct

D . A charitable and marital deduction is allowed in computing the taxable transfers

With the unlimited marital deduction, the amount of property that can be transferred between spouses is unlimited.

Charitable deduction is also allowed as deduction

so option D is the Correct Answer