Identify Which of the Following Statements Is True

question 91

Multiple Choice

Identify which of the following statements is true.

• A)If the gifted property's FMV on the date of the gift exceeds its adjusted basis and the donor pays no gift tax, the donee's basis is the same as the donor's basis if the property is sold for a loss.
• B)Prospective donors should not dispose of property that has declined in value by selling it rather than gifting it.
• C)A $15,000 annual exclusion per donee is available for both gift tax and estate tax purposes.
• D)All of the above are false.

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Definitions:

Levered Firm

A corporation that has debt in its capital structure, indicating it uses borrowing (leverage) to finance its operations or expansions.

M&M Proposition I

A principle of financial theory stating that under perfect market conditions, the value of a firm is unaffected by how it is financed.

Liquidation

The process of converting assets into cash or cash equivalents by selling them in the market.

Going Concern

An accounting assumption that a company will continue to operate for the foreseeable future, thus justifying the presence of its assets and liabilities.