True or False
True or False
Generally, the donee takes the donor’s FMV as their basis in property they received as a gift.
False
Generally, the donee takes the donor’s basis in the property.
Under TRA 97, the Tax Court has jurisdiction for declaratory judgment relating to the value of gifts made after 8/5/97. The ______ is the only one with standing to bring a petition to the Court and must first exhaust all administrative remedies within the IRS.
donor
A/an ________ estate and gift tax charitable deduction applies on transfers to charitable organizations, as long as the bequest or gift has a public purpose.
1) $17,000
2) unlimited
3) inflation-indexed
2) unlimited
True or False
Below market loans are not subject to gift tax.
False.
Under §7872, the lender is treated as making a gift to the borrower and receiving interest income and the borrower is treated as paying interest expense. If the loan is a demand loan, the lender is treated as making a gift each year the loan is outstanding (the gift amount is the forgone interest income for each portion of the year the loan is outstanding).
True or False
Gains on gift property: if the fair market value (FMV) of the gift property on the date of the gift exceeds or equals the donor’s basis, the donee retains the donor’s basis.
True
Losses on gift property: if the _____ of the gift property on the date of the gift is ____ than the donor’s basis, the donee uses the _____ for purposes of computing losses.
FMV, less, FMV
Regarding the gift tax return, a/an _________ statute of limitation applies if an omission is greater than 25%.
1) Three-year
2) unlimited
3) Six-year
Six years
True or False
Assignment of life insurance policy is subject to gift tax
True
It is valued at the amount it would cost to buy comparable policy on gift date.
A transfer to a revocable trust is considered a completed gift.
False.
In a revocable trust, the grantor retains control over the property by reserving the right to revoke the trust or to change the beneficiaries. A transfer to an irrevocable trust can also be incomplete if the donor reserves power over the property’s disposition.
Transfers subject to gift tax:
Forgiveness of a ___ with a donative intent.
debt
Transfers not subject to the gift tax:
--transfers to _______ organizations,
--transfers incident to a _________,
-- charitable contributions, to a qualified _______.
political, divorce, charity