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American College Exam HS330 Topic 1 Question 101 Discussion

Actual exam question for American College's HS330 exam
Question #: 101
Topic #: 1
[All HS330 Questions]

Alan, a widower, is a retired executive with substantial assets. He wishes to provide for the financial security of his two grandchildren since their father, Alan's son, has always managed money poorly. This year Alan would like each grandchild to receive a substantial gift. Which of the following statements concerning the generation-skipping transfer tax (GSTT) on these gifts is (are) correct?

1. Federal estate or gift tax will not be imposed if the gift is otherwise subject to the GSTT.

2. Assuming no prior gifts, Alan can gift a cumulative total of (not including the annual exclusion) $1.5 million to his grandchildren without the imposition of the GSTT.

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Suggested Answer: B

Contribute your Thoughts:

France
21 days ago
Wait, did they just say 'Alan, a widower'? That makes this even more complicated. I feel for the guy, but he better get some good advice on this.
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Katie
21 hours ago
B: No, I believe it's C) Both I and II.
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Jina
2 days ago
A: I think the answer is B) II only.
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Mitzie
1 months ago
I agree with Rutha, I think the answer is C) Both I and II because Alan can gift up to $1.5 million without GSTT.
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Lizbeth
1 months ago
Okay, so Alan's trying to do something nice for his grandkids. I hope he knows what he's doing with this GSTT thing.
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Yuki
6 days ago
I think Alan should consult with a tax professional to make sure he's making the right decision.
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Felicitas
16 days ago
A) I only
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Lucy
1 months ago
Hmm, let me think about this. The GSTT is a tricky one, but I'm pretty sure the answer is C - both statements are correct.
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Tresa
1 months ago
What? There's a tax on skipping generations? Sounds like a plot from a sci-fi movie.
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Brandee
2 days ago
Linsey: Right, he can gift up to $1.5 million without triggering the GSTT.
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Olive
6 days ago
User 3: So, Alan needs to be careful with how much he gifts to his grandchildren to avoid the GSTT.
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Linsey
8 days ago
User 2: I heard about that. It's to prevent wealthy individuals from avoiding estate taxes by passing assets directly to grandchildren.
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Malcolm
22 days ago
User 1: Yeah, it's called the generation-skipping transfer tax.
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Rutha
1 months ago
I disagree, I believe the answer is C) Both I and II.
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Fannie
2 months ago
I think the answer is B) II only.
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