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11 Dec 2019

Which of the following statements is true regarding the filingof a gift tax return?

A. Spouses using thegift-splitting provision do not have to file a return unless thegifts exceed $28,000.

B. A gift tax return must befiled when a gift to a church exceeds the annual exclusion.

C. A gift tax return is duewithin five months of making the gift.

D. No gift tax return is requiredto be filed for gifts between spouses.

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Patrina Schowalter
Patrina SchowalterLv2
13 Dec 2019
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Related questions

Identify which of the following statements is false

A. The Lifetime Exemption applies only to gifts given.
B. Casualty or theft losses incurred during the administration of the estate are deductible on the estate tax return.
C. The estate tax return is due, ignoring extensions, 9 months after the decedent's date of death.

Which of the following transactions constitutes a taxable gift made by Ellen, a widow, in the current year?
A. Ellen transfers $60,000 to a bank account with Hazel. Hazel does not contribute any money to the account.
B. Ellen deposits $100,000 cash and Dennis deposits $5,000 cash into a joint savings account. Dennis withdraws $20,000.
C. Ellen gives her church $15,000.
D. Ellen pays the hospital medical bills for her friend Paige directly to the hospital.

On February first of this year, Hall learned that he was bequeathed 500 shares of common stock under his father's will. Hall's father had paid $2,500 for the stock 10 years ago and the fair market value of this stock at the date of his father's death was $4,500. However, the stock decreased six months later to a value of $4.000. The executor of the estate elected the alternate valuation date for estate tax purposes. Hall sold the stock later in the year for $4,200. How much gain or loss must Hall include in this tax return for the 500 shares sold?

A. $200 LTCG
B. $300 LTCL
C. $200 STCG

In 2018, Bill gave $60,000 to his sister to pay medical bills; $40,000 to his father to help with household expenses, and $20,000 to his adult son. Bill and his wife elect gift splitting. What is the total of Bill's' taxable gifts (remember the change in the 2018 annual exclusion)?
A. none
B. $15,000
C. $20,000
D. $60,000

Mary Jones died in 2017 with a taxable estate of $6,000,000. What is her estate tax liability?
A. $204,000
B. $2,400,000
C. $220,000

Vincent makes the following property transfers in the current year.
· $20,000 for tuition given to the grandson
· $1,000 medical expense for a child paid directly to a hospital\
· $500 donation to the Democratic party
· $10,000 property settlement in conjunction with a divorce
Vincent's gifts for the year before considering the annual gift tax exclusion total
A. $0
B. $21,000
C. $20,000

Betty dies on February 20 of the current year. Her estate consisted of the following assets, all valued as of her date of death:
Stock with a basis of $40,000 and a fair market value of $200,000. The stock was purchased in Joint Tenancy with her sister, with Betty paying all of the purchase price.
Land valued at $1,500,000 and a basis of $490,000. The land was purchased with her brother in Joint Tenancy, with her brother paying 60% of the purchase price.
Cash of $70,000

What is Betty’s gross estate?
$870,000.
$1,770,000.
$1,670,000.

Identify which of the following statements is false

A. Regardless of how large the gross estate is, the estate tax liability can be completely eliminated if the estate is willed to a charitable organization.
B. The Lifetime Exemption applies only to gifts given.
C. Casualty or theft losses incurred during the administration of the estate are deductible on the estate tax return.
D. The estate tax return is due, ignoring extensions, 9 months after the decedent's date of death.

Which of the following transactions constitutes a taxable gift made by Ellen, a widow, in the current year?
A. Ellen transfers $60,000 to a bank account with Hazel. Hazel does not contribute any money to the account.
B. Ellen deposits $100,000 cash and Dennis deposits $5,000 cash into a joint savings account. Dennis withdraws $20,000.
C. Ellen gives her church $15,000.
D. Ellen pays the hospital medical bills for her friend Paige directly to the hospital.

On February first of this year, Hall learned that he was bequeathed 500 shares of common stock under his father's will. Hall's father had paid $2,500 for the stock 10 years ago and the fair market value of this stock at the date of his father's death was $4,500. However, the stock decreased six months later to a value of $4.000. The executor of the estate elected the alternate valuation date for estate tax purposes. Hall sold the stock later in the year for $4,200. How much gain or loss must Hall include in this tax return for the 500 shares sold?

A. $1,700 LTCG
B. $200 LTCG
C. $300 LTCL
D. $200 STCG

In 2018, Bill gave $60,000 to his sister to pay medical bills; $40,000 to his father to help with household expenses, and $20,000 to his adult son. Bill and his wife elect gift splitting. What is the total of Bill's' taxable gifts (remember the change in the 2018 annual exclusion)?
A. none
B. $15,000
C. $20,000
D. $60,000

Mary Jones died in 2017 with a taxable estate of $6,000,000. What is her estate tax liability?
A. $204,000
B. $2,400,000
C. $0
D. $220,000

Vincent makes the following property transfers in the current year.
· $20,000 for tuition given to the grandson
· $1,000 medical expense for a child paid directly to a hospital\
· $500 donation to the Democratic party
· $10,000 property settlement in conjunction with a divorce
Vincent's gifts for the year before considering the annual gift tax exclusion total
A. $0
B. $21,000
C. $20,000
D. $21,500.

Betty dies on February 20 of the current year. Her estate consisted of the following assets, all valued as of her date of death:
Stock with a basis of $40,000 and a fair market value of $200,000. The stock was purchased in Joint Tenancy with her sister, with Betty paying all of the purchase price.
Land valued at $1,500,000 and a basis of $490,000. The land was purchased with her brother in Joint Tenancy, with her brother paying 60% of the purchase price.
Cash of $70,000

What is Betty’s gross estate?
A. $870,000.
B. $600,000.
C. $1,770,000.
D. $1,670,000.

Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Alice’s birthday is September 21, 1969, and Bruce’s is June 27, 1968. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247 Central Avenue, Hauppauge, NY 11788 (employer identification number 11-1111111). The following information is shown on their Wage and Tax Statements (Form W–2) for 2016.

Line Description

Alice Bruce 1 Wages, tips, other compensation $58,000 $62,100

2 Federal income tax withheld 4,500 6,300

3 Social Security wages 58,000 62,100

4 Social Security tax withheld 3,596 3,850

5 Medicare wages and tips 58,000 62,100

6 Medicare tax withheld 841 900

15 State Massachusetts Massachusetts

16 State wages, tips, etc. 58,000 62,100

17 State income tax withheld 2,950 3,100

The Byrds provide over half of the support of their two children, Cynthia (born January 25, 1992, Social Security number 123-45-6788) and John (born February 7, 1996, Social Security number 123-45-6786). Both children are full-time students and live with the Byrds except when they are away at college. Cynthia earned $4,200 from a summer internship in 2016, and John earned $3,800 from a part-time job. During 2016, the Byrds provided 60% of the total support of Bruce’s widower father, Sam Byrd (born March 6, 1940, Social Security number 123-45-6787). Sam lived alone and covered the rest of his support with his Social Security benefits. Sam died in November, and Bruce, the beneficiary of a policy on Sam’s life, received life insurance proceeds of $1,600,000 on December 28. The Byrds had the following expenses relating to their personal residence during 2016:

Property taxes $5,000

Qualified interest on home mortgage 8,700 Repairs to roof 5,750

Utilities 4,100

Fire and theft insurance 1,900

The Byrds had the following medical expenses for 2016:

Medical insurance premiums $4,500

Doctor bill for Sam incurred in 2015 and not paid until 2016 7,600

Operation for Sam 8,500

Prescription medicines for Sam 900

Hospital expenses for Sam 3,500

Reimbursement from insurance company, received in 2016 3,600

The medical expenses for Sam represent most of the 60% that Bruce contributed toward his father’s support. Other relevant information follows:

• When they filed their 2015 state return in 2016, the Byrds paid additional state income tax of $900.

• During 2016, Alice and Bruce attended a dinner dance sponsored by the Lowell Police Disability Association (a qualified charitable organization). The Byrds paid $300 for the tickets. The cost of comparable entertainment would normally be $50.

• The Byrds contributed $5,000 to Lowell Presbyterian Church and gave used clothing (cost of $1,200 and fair market value of $350) to the Salvation Army. All donations are supported by receipts, and the clothing is in very good condition.

• Alice and Bruce made a gift to a needy family who lost their home in a fire ($100). In addition, they made several cash gifts to homeless men downtown ($35).

• In 2016, the Byrds received interest income of $2,750, which was reported on a Form 1099–INT from Second National Bank, 125 Oak Street, Lowell, MA 01850 (Employer Identification Number 98-7654322). The mortgage (outstanding balance of $425,000 as of January 1, 2016) was taken out by the Byrds on May 1, 2012.

• Alice’s employer requires that all employees wear uniforms to work. During 2016, Alice spent $850 on new uniforms and $566 on laundry charges.

• Bruce paid $400 for an annual subscription to the Journal of Franchise Management and $741 for annual membership dues to his professional association.

• Neither Alice’s nor Bruce’s employer reimburses for employee expenses.

• The Byrds do not keep the receipts for the sales taxes they paid and had no major purchases subject to sales tax.

• All members of the Byrd family had health care coverage for all months of 2016.

• This year the Byrds gave each of their children $2,000, which was then deposited into their Roth IRAs.

• Alice and Bruce paid no estimated Federal income tax.

Neither Alice nor Bruce wants to designate $3 to the Presidential Election Campaign.

Tax Computation:

Compute net tax payable or refund due for Alice and Bruce Byrd for 2016. If they have overpaid, they want the amount to be refunded to them. If you use tax forms for your computations, you will need Forms 1040 and 2106 and Schedules A and B.

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