Identify Which of the Following Statements Is True

question 2

Multiple Choice

Identify which of the following statements is true.

• A)Reversionary interests of less than 5% are includible in the gross estate.
• B)A reversionary interest means a chance exists that the property may pass back to the transferor under the terms of the transfer.
• C)If a reversionary interest exceeds 3% of the property's value, the amount that is included in the estate is not the value of the reversionary interest, but rather the date-of-death value of the gifted property less the value of intervening life estates.
• D)All of the above are false.

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Definitions:

Implied-in-Law Condition

A legally imposed condition in a contractual agreement, not explicitly stated, created to ensure fairness and justice, often derived from the nature of the agreement or parties' intentions.

Substantially Performed

A term indicating that the major and necessary tasks of a contract have been completed, even if minor details may have been omitted.

Commercial Impracticability

A legal defense that excuses the performance of a contract due to unforeseen and uncontrollable circumstances that make fulfillment excessively burdensome or impossible.

Financially Unsound Contract

A contract deemed as high-risk due to the financial instability or inability of one or more parties to fulfill their obligations.