Gift And Estate Taxation

Front 1

How is Gift taxation different from Estate taxation?

Back 1

Property transferred while taxpayer is living

Hint 1

Gift and Estate Taxation

Front 2

What is the annual exclusion amount for a taxpayer's Gift taxation? What is required to get the exclusion?

Back 2

$14,000 per year per spouse to each individualIn order to get the exclusion, the recipient must immediately acquire a present interest in the property and get unrestricted access to the property and all of its benefits

Hint 2

Gift and Estate Taxation

Front 3

If a Gift is an annuity, what value is used for the Gift?

Back 3

If the Gift is an annuity, use Present Value to determine the gross Gift

Hint 3

Gift and Estate Taxation

Front 4

What is the basic Gift tax calculation?

Back 4

Gross Gifts- 1/2 of Gifts (treated as given by spouse)- Total # of donees x $14,000 exclusion= Taxable Gift

Hint 4

Gift and Estate Taxation

Front 5

How is a Gift taxed if a recipient gains a future ownership in the Gifted property?

Back 5

Recipient must gain ownership and all rights to property to get the annual exclusion. If recipient merely gains a future ownership, then the present value of the Gift is 100% taxable to donor and cannot exclude from Gift tax calc

Hint 5

Gift and Estate Taxation

Front 6

What are the deductions for Gift tax, besides the annual exclusion?

Back 6

Tuition and medical expenses paid directly to the provider organization (note: NOT books or dorm fees)Political contributionsCharitable GiftsUnlimited Gifts to spouse

Hint 6

Gift and Estate Taxation

Front 7

What is the basis of Gifted property for the recipient?

Back 7

If a loss on sale, basis is FMV on the date of the GiftIf a gain on sale, basis is same as donor's basisNo G/L if donor basis is less than sales price, and sales price is less than FMV @ Gift date

Hint 7

Gift and Estate Taxation

Front 8

How/when are Gift tax returns filed?

Back 8

Calendar-year basis onlyDue April 15

Hint 8

Gift and Estate Taxation

Front 9

What are the basic characteristics of complex Trust?

Back 9

Income distributions are optionalAccumulation of income okCharitable contributions okContributions using tax-exempt income are not deductibleAllowed personal exemption of $100Key Point: Distribution of Trust corpus (principal) ok

Hint 9

Gift and Estate Taxation

Front 10

What are the basic characteristics of a Simple Trust?

Back 10

Income distributions mandatory Accumulation of income disallowedNo charitable contributionsDistribution of Trust corpus DISALLOWEDAllowed personal exemption of $300

Hint 10

Gift and Estate Taxation

Front 11

How are Net Operating Losses handled in a Trust?

Back 11

Trusts can have a Net Operating LossAny unused NOL flows through to the beneficiaries

Hint 11

Gift and Estate Taxation

Front 12

How are expenses and fees related to tax-exempt income handled in a Trust?

Back 12

Expenses and fees from tax-exempt income are not deductible for either a Complex or Simple Trust

Hint 12

Gift and Estate Taxation

Front 13

When is property transferred in an Estate?

Back 13

After the death of the donor

Hint 13

Gift and Estate Taxation

Front 14

What amount of a decedent's Estate is exempt from Estate Tax?

Back 14

The First $5,250,000 is exempt with a 40% tax on amount above that

Hint 14

Gift and Estate Taxation

Front 15

How are a decedent's medical expenses handled with respect to an Estate?

Back 15

Medical expenses paid after death, but incurred within 1 year of death go on decedents personal tax return

Hint 15

Gift and Estate Taxation

Front 16

How is an Estate's NOL handled?

Back 16

Estates can have a Net Operating LossAny unused NOL flows through to the beneficiaries

Hint 16

Gift and Estate Taxation

Front 17

What does a gross Estate consist of?

Back 17

Cash and Property FMV at death, or alternate valuation.

Hint 17

Gift and Estate Taxation

Front 18

What is joint tenancy with respect to an Estate? How is it calculated?

Back 18

When two non-spouses jointly own propertyFMV at death X % Ownership = Amount in Estate

Hint 18

Gift and Estate Taxation

Front 19

What is tenancy by entirety?

Back 19

1/2 of marital assets go to deceased spouses Estate

Hint 19

Gift and Estate Taxation

Front 20

What is tenancy in common in an Estate?

Back 20

A, B, and C own propertyIf A dies, FMV of As share goes to heirs

Hint 20

Gift and Estate Taxation

Front 21

How is Estate tax handled with respect to a beneficiary?

Back 21

Property received through inheritance not income to recipientProperty value is FMV at date of death or 6 months laterIf property is sold prior to 6 month date and the alternative date is used, FMV at date of sale is used to value propertyBasis in property automatically assumes LT holding period

Hint 21

Gift and Estate Taxation

Front 22

What is distributable net income (DNI)?

Back 22

DNI = Taxable Income Expenses (from income production)Trust beneficiaries only pay tax if earnings are distributedEstate beneficiaries pay tax on DNI, regardless if distributed

Hint 22

Gift and Estate Taxation

Front 23

When must a tax exempt organization file a 990-T for Unrelated Business Income?

Back 23

If a tax exempt organization has more than $1,000 of UBI, it must file a Form 990-T

Hint 23

Gift and Estate Taxation

Front 24

What are the requirements for a 501(c)3 organization?

Back 24

Organized and Operated exclusively for exempt purposes No earnings can benefit an individual or private shareholder Cant attempt to influence legislation as a major part of its activities Cant campaign politically

Hint 24

Gift and Estate Taxation