Questions from Federal Taxation

Q: Kwambe is thinking of making a substantial gift of stock to his

Kwambe is thinking of making a substantial gift of stock to his fiancée, Maya. The wedding is scheduled for October 1 of the current year. Kwambe already has exhausted his unified credit. He also is c...

Q: Janet (who has made no taxable gifts) is considering transferring

Janet (who has made no taxable gifts) is considering transferring assets valued at $9 million to an irrevocable trust (yet to be created) for the benefit of her son, Gordon, age 15, with Farmers Bank...

Q: Melvin funds an irrevocable trust with Holcomb Bank as trustee and reserves

Melvin funds an irrevocable trust with Holcomb Bank as trustee and reserves the right to receive the income for seven years. He provides that at the end of the seventh year the trust assets will pass...

Q: On October 1, Sam lends Tom $10 million. Tom

On October 1, Sam lends Tom $10 million. Tom signs an interestfree demand note. The loan is still outstanding on December 31. Explain the income tax and gift tax consequences of the loan to both Sam a...

Q: In 2017, Sondra makes taxable gifts aggregating $300,000

In 2017, Sondra makes taxable gifts aggregating $300,000. Her only other taxable gifts amount to $200,000, all of which she made in 1997. a. What is Sondra’s 2017 gift tax liability? b. What is her...

Q: Amir made taxable gifts as follows: $800,000 in

Amir made taxable gifts as follows: $800,000 in 1975, $1.2 million in 1999, and $600,000 in 2017. What is Amir’s gift tax liability for 2017?

Q: In the current year, Beth, who is single, sells

In the current year, Beth, who is single, sells stock valued at $40,000 to Linda for $18,000. Later that year, Beth gives Linda $12,000 in cash. a. What is the amount of Beth’s taxable gifts? b. How...

Q: In the current year, David gives $180,000 of

In the current year, David gives $180,000 of land to David, Jr. In the current year, David’s wife gives $200,000 of land to George and $44,000 cash to David, Jr. Assume the couple elects gift splittin...

Q: Yolanda and Xavier, spouses, have four adult children, Andy

Yolanda and Xavier, spouses, have four adult children, Andy, Betty, Cathy, and Danny. In 2017, they made a number of gifts. Yolanda gave Andy cash of $40,000 and Betty stock valued at $60,000. Xavier...

Q: In the current year, Emily, a widow, engages in

In the current year, Emily, a widow, engages in the following transactions. Determine the amount of the completed gift, if any, arising from each of the following occurrences. a. Emily names Lauren t...