Classify Each Statement Appearing Below

question 13

Short Answer

Classify each statement appearing below.
a. No taxable transfer occurs
b. Gift tax applies
c. Estate tax applies
-Van takes out an insurance policy on his life and designates his estate as the beneficiary. Van dies four years later.

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Definitions:

Profit Margin

A financial ratio indicating the percentage of revenue that remains as profit after all expenses are deducted.

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue; calculated by dividing sales over a period by the average investment.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales by comparing net income and net sales.

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue; the ratio of the cost of goods sold to the average inventory.