<p><span style="color: #333333; font-family: 'Open Sans', sans-serif; font-size: 14px; text-align: justify; background-color: #ffffff;">Describe the property transfers that qualify as gifts and define transfers that are not gifts for transfer tax purposes.</span></p>

Question

In: Accounting

Describe the property transfers that qualify as gifts and define transfers that are not gifts for transfer tax purposes.

Solutions

Expert Solution

A gift is defined as a transfer for inadequate consideration such as a transfer for love and affection. Hence, transfers for adequate consideration are not gifts for transfer tax purposes. For example, the gift tax is not imposed on payments associated with sales of goods or services because these transfers occur in a business context where consideration (money) is exchanged for the goods or services. Neither is the satisfaction of an obligation considered a gift. For example, tuition payments for a child’s education would satisfy a support obligation and would not be considered a gift.

A gift is defined as a transfer for inadequate consideration such as a transfer for love and affection.

Renze Joy Candido answered 1 year ago

Next > < Previous

Related Solutions

For the following exchanges, indicate which qualify as like-kind property for purposes of section 1031 (tax-free...

For the following exchanges, indicate which qualify as like-kind property for purposes of section 1031 (tax-free exchanges): a. Land held for investment for land to be used as the site for an apartment building b. Rental condo in Las Vegas for a condo in Ventura to be used as a personal vacation home c. Stock in American Airlines for stock in Southwest Airlines d. Factory building in Detroit for an office building in New York e. Used truck used in...

1. Which of the following expenses, if any, qualify as deductible for Federal income tax purposes?...

1. Which of the following expenses, if any, qualify as deductible for Federal income tax purposes? a. Contribution to a Roth IRA. b. Contribution to a traditional IRA c. Contributions to a Coverdell Education Savings Account. . d. Contributions to a qualified tuition program (§ 529 plan) 2. If a residence is used primarily for personal use (rented for fewer than 15 days per year), which of the following is correct? a. No expenses are deductible. b. No income is...

Trista transfers property with a tax basis of $900 and a fair market value of $1,200...

Trista transfers property with a tax basis of $900 and a fair market value of $1,200 to a corporation in exchange for stock with a fair market value of $950 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $250 on the property transferred. What is Tristan's stock tax basis after the exchange?

11), 12), 13) & 14): Assume a transfer under IRC Section 351. Andy transfers property with...

11), 12), 13) & 14): Assume a transfer under IRC Section 351. Andy transfers property with a FMV of $70,000 and adjusted basis of $30,000 to a controlled corporation in exchange for stock: $65,000 and cash and other property: $5,000. 11) The amount of boot received by the shareholder is a $5,000 b $15,000 c $20,000 d $30,000 12) The gain recognized by the shareholder is a $5,000 b $15,000 c $20,000 d $30,000 13) The shareholder's basis in the...

Define a partnership for tax purposes. Summarize the rules for partnership income reporting

Describe how goodwill amortized for tax purposes for not for book purposes (i.e. no impairment) leads...

Describe how goodwill amortized for tax purposes for not for book purposes (i.e. no impairment) leads to temporary book-tax differences? Why does Congress provide the dividends received deduction for corporations receiving dividends?

Kansas Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000...

Kansas Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The sKansas Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and selling for $15 per share. At what amount should the building be recorded by Kansas Company? $180,000 $210,000 $120,000 $60,000

A machine is classified as a ten-year MACRS property. Compute the book value for tax purposes...

A machine is classified as a ten-year MACRS property. Compute the book value for tax purposes at the end of five years. The cost basis is $225,000.

1. Taxpayers can claim a child tax credit for a qualifying child. Define qualify child. 2....

1. Taxpayers can claim a child tax credit for a qualifying child. Define qualify child. 2. For purposes of the tax credit for child and dependent care expenses, explain the limitations concerning the amount of qualified expenses that can be used to calculate the credit.

What are acceptable Transfer Pricing methods under US Tax Code? Define and briefly explain “Discretionary Transfer...

What are acceptable Transfer Pricing methods under US Tax Code? Define and briefly explain “Discretionary Transfer Prices,” “Negotiated Transfer Price,” and “Goal Congruence.” Define and briefly explain “Comparable Uncontrolled Transaction,” “Advance Pricing Agreement,” and “Arm’s Length Transaction.”

Subjects