<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.

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 2 years ago

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