Jose Set Up a Trust for His Two Married Daughters

question 8

Essay

Jose set up a trust for his two married daughters with $500,000 of stocks and bonds at the end of 2017. Jose can change the trust beneficiaries at any time, however. In 2018, each of the daughters receives $16,000 from the trust. What are Jose's gift tax consequences as a result of these events? Explain.

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Definitions:

Bidirectional View

A perspective that considers mutual influences, suggesting that two variables or entities affect each other in both directions.

Conceiving a Child

The process by which a sperm fertilizes an egg, leading to the initiation of pregnancy.

Stigma

The portion of the carpel where pollen grains land during pollination (and before fertilization).

Style

The neck connecting the stigma to the ovary of a carpel.