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24 Cards in this Set
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- Back
- 3rd side (hint)
How is Gift taxation different from Estate taxation? |
Property transferred while taxpayer is living
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Gift and Estate Taxation
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What is the annual exclusion amount for a taxpayer's Gift taxation? What is required to get the exclusion?
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$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
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Gift and Estate Taxation
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If a Gift is an annuity, what value is used for the Gift? |
If the Gift is an annuity, use Present Value to determine the gross Gift
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Gift and Estate Taxation
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What is the basic Gift tax calculation? |
Gross Gifts- 1/2 of Gifts (treated as given by spouse)- Total # of donees x $14,000 exclusion= Taxable Gift
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Gift and Estate Taxation
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How is a Gift taxed if a recipient gains a future ownership in the Gifted property?
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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
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Gift and Estate Taxation
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What are the deductions for Gift tax, besides the annual exclusion?
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Tuition and medical expenses paid directly to the provider organization (note: NOT books or dorm fees)Political contributionsCharitable GiftsUnlimited Gifts to spouse
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Gift and Estate Taxation
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What is the basis of Gifted property for the recipient? |
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
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Gift and Estate Taxation
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How/when are Gift tax returns filed?
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Calendar-year basis onlyDue April 15
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Gift and Estate Taxation
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What are the basic characteristics of complex Trust?
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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
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Gift and Estate Taxation
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What are the basic characteristics of a Simple Trust?
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Income distributions mandatory Accumulation of income disallowedNo charitable contributionsDistribution of Trust corpus DISALLOWEDAllowed personal exemption of $300
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Gift and Estate Taxation
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How are Net Operating Losses handled in a Trust?
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Trusts can have a Net Operating LossAny unused NOL flows through to the beneficiaries
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Gift and Estate Taxation
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How are expenses and fees related to tax-exempt income handled in a Trust?
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Expenses and fees from tax-exempt income are not deductible for either a Complex or Simple Trust
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Gift and Estate Taxation
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When is property transferred in an Estate?
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After the death of the donor
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Gift and Estate Taxation
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What amount of a decedent's Estate is exempt from Estate Tax?
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The First $5,250,000 is exempt with a 40% tax on amount above that |
Gift and Estate Taxation
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How are a decedent's medical expenses handled with respect to an Estate?
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Medical expenses paid after death, but incurred within 1 year of death go on decedents personal tax return
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Gift and Estate Taxation
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How is an Estate's NOL handled?
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Estates can have a Net Operating LossAny unused NOL flows through to the beneficiaries
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Gift and Estate Taxation
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What does a gross Estate consist of?
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Cash and Property FMV at death, or alternate valuation.
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Gift and Estate Taxation
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What is joint tenancy with respect to an Estate? How is it calculated?
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When two non-spouses jointly own propertyFMV at death X % Ownership = Amount in Estate
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Gift and Estate Taxation
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What is tenancy by entirety?
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1/2 of marital assets go to deceased spouses Estate
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Gift and Estate Taxation
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What is tenancy in common in an Estate?
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A, B, and C own propertyIf A dies, FMV of As share goes to heirs
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Gift and Estate Taxation
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How is Estate tax handled with respect to a beneficiary?
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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
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Gift and Estate Taxation
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What is distributable net income (DNI)?
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DNI = Taxable Income Expenses (from income production)Trust beneficiaries only pay tax if earnings are distributedEstate beneficiaries pay tax on DNI, regardless if distributed
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Gift and Estate Taxation
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When must a tax exempt organization file a 990-T for Unrelated Business Income?
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If a tax exempt organization has more than $1,000 of UBI, it must file a Form 990-T |
Gift and Estate Taxation
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What are the requirements for a 501(c)3 organization?
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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 |
Gift and Estate Taxation
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