Gift Tax Essay

1606 Words Sep 27th, 2015 7 Pages
Homework 3 LEI FENG(Kimmy)
Problem3
(1) Two years ago, Decedent gave Child $750,000 in cash. Decedent dies in the current year. (a) What is included in Decedent’s gross estate?
Decedent made a transfer within 3 years of death. Under Section 2035(a), nothing is included in Decedent’s gross estate, because it’s a cash gift. However, under Section 2035(b), the amount of the gross estate shall be increased by the amount of any tax paid on any gift made by the decedent during the 3-year period ending on the date of the decedent’s death. So the amount of gift tax of this gift the decedent paid is included in his gross estate. (b) What is the result in question (1)(a), above, if
…show more content…
Under Section 2035(a), nothing is included in Decedent’s gross estate, because it’s a cash gift. However, under Section 2035(b), the amount of the gross estate shall be increased by the amount of any tax paid on any gift made by the decedent during the 3-year period ending on the date of the decedent’s death. So the amount of gift tax the decedent paid, which is $120,000 is included in his gross estate. (b) If Deathly had held on and lived for four years after the gift, what would be included in Deathly’s gross estate under Section 2035?
Nothing is included in gross estate under section 2035, because Deathly had held on and lived for four years after the gift, which was not made within 3 years of death. (c) If Deathly had not made the gift (and, consequently, had not paid the $120,000 gift tax), what would be included in Deathly’s gross estate?
Nothing is included in gross estate under section 2035, since Deathly had not made the gift and, consequently, had not paid the gift tax. However, under Section 2033, at least $420,000 would be included in gross estate, because Deathly have the interest of the property at the time D’s death.
Problem 4 (1) D transfers securities to a trust, retaining some right to the trust income for some period described in the subparts of this question. What does Section 2036 require to be included in D’s gross estate in

Related Documents