Federal Estate and Gift Tax Exam
Questions & Answers (Grade A+)
Wealth Transfer Principle -
correct answer ✅The estate and gift taxes are imposed on the
donor upon the transfer of wealth to another.
Estate and Gift Tax Structure -
correct answer ✅Uniform rate structure
Federal Gift Tax -
correct answer ✅imposed on any completed or irrevocable
transfer by gift.
Gift: a transfer for less than full and adequate consideration. Very
broad.
*Note: different definition than for fed income tax rules* (a transfer
made out of detached and disinterested generosity)
Examples:
- A bargain sale of property to a family member
- An interest-free loan to a family member
, Federal Estate and Gift Tax Exam
Questions & Answers (Grade A+)
- Mom purchasing real estate in joint-title with right of survivorship
with child.
Power of Appointment -
correct answer ✅A GENERAL power of appointment is one that
may be exercised in favor of the holder of the power, his estate, his
creditors, or creditors of his estate.
The exercise or release of a GENERAL power of appointment is
deemed to be a transfer of property by the individual possessing
such power, and is subject to gift tax. A timely disclaimer or
renunciation of the general power is not equivalent to the exercise
or release of it.
A transfer of a power of appointment will not be subject to gift tax
IF:
- it is limited to conditions related to health, education, support or
maintenance;
- it can only be exercised with the consent of the grantor; OR
- it can only be exercised with consent of another with an adverse
interest.
Questions & Answers (Grade A+)
Wealth Transfer Principle -
correct answer ✅The estate and gift taxes are imposed on the
donor upon the transfer of wealth to another.
Estate and Gift Tax Structure -
correct answer ✅Uniform rate structure
Federal Gift Tax -
correct answer ✅imposed on any completed or irrevocable
transfer by gift.
Gift: a transfer for less than full and adequate consideration. Very
broad.
*Note: different definition than for fed income tax rules* (a transfer
made out of detached and disinterested generosity)
Examples:
- A bargain sale of property to a family member
- An interest-free loan to a family member
, Federal Estate and Gift Tax Exam
Questions & Answers (Grade A+)
- Mom purchasing real estate in joint-title with right of survivorship
with child.
Power of Appointment -
correct answer ✅A GENERAL power of appointment is one that
may be exercised in favor of the holder of the power, his estate, his
creditors, or creditors of his estate.
The exercise or release of a GENERAL power of appointment is
deemed to be a transfer of property by the individual possessing
such power, and is subject to gift tax. A timely disclaimer or
renunciation of the general power is not equivalent to the exercise
or release of it.
A transfer of a power of appointment will not be subject to gift tax
IF:
- it is limited to conditions related to health, education, support or
maintenance;
- it can only be exercised with the consent of the grantor; OR
- it can only be exercised with consent of another with an adverse
interest.
