American College Exam HS330 Topic 1 Question 84 Discussion

Actual exam question for American College's HS330 exam

Question #: 84
Topic #: 1

Tax benefits of making lifetime gifts in excess of the gift tax annual exclusion include all the following EXCEPT:

AThe gift tax paid on a gift made more than 3 years prior to the death of the donor avoids inclusion the donor's gross estate.

BAppreciation in the value of a gift of real property after the date of the gift increases the donor's federal estate tax liability.

CIncome taxes can be saved if a high-income donor gives income-producing property to a lowincome donee.

DGift taxes are payable at the same tax rate as estate taxes.

Show Suggested Answer

Suggested Answer: B

by Charlene at Apr 14, 2024, 10:03 PM

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Kasandra

8 days ago

I don't know, that just sounds too good to be true. I'm pretty sure the IRS has some rules about that kind of thing. You don't want to end up in hot water with the tax man, am I right?

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Portia

9 days ago

You know, I'm really curious about option C. Saving income taxes by giving income-producing property to a low-income donee sounds like a great strategy. Maybe I should look into that.

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Hmm, I'm not so sure about that. I was thinking option A might be the correct answer. The gift tax paid on a gift made more than 3 years prior to the death of the donor should avoid inclusion in the donor's gross estate, right?

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Domitila

12 days ago

I think option B is the correct answer. Appreciation in the value of a gift of real property after the date of the gift would increase the donor's federal estate tax liability, not decrease it.

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Georgeanna

14 days ago

Agreed. I'm worried about the gift tax and how it might affect my estate planning. Does anyone have experience with this?

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Rory

15 days ago

This is a tricky question. I'm not sure about the answer, but I think it's important to understand the tax implications of making lifetime gifts.

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American College Exam HS330 Topic 1 Question 84 Discussion

Contribute your Thoughts:

Kasandra

Portia

Catarina

Domitila

Georgeanna

Rory