The Shelter Rule Applies Even If the Transferee Was a Party

question 12

True/False

The shelter rule applies even if the transferee was a party to fraud or illegality affecting the instrument.

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Definitions:

Employer's Portion

The part of employment taxes and benefits that the employer is responsible for paying, separate from employee withholdings.

Taxes

Mandatory financial contributions imposed by a government on individuals, corporations, and other entities to fund public expenditures.

FICA

FICA stands for the Federal Insurance Contributions Act and refers to the taxes collected to fund Social Security and Medicare programs in the United States.

SUTA

A state-level tax paid by employers to fund the state’s unemployment insurance program.