Identify Which of the Following Statements Is True

question 64

Multiple Choice

Identify which of the following statements is true.

• A)A taxable gift may occur when property is sold in an arm's length transaction for less than its FMV.
• B)An individual can inadvertently make a gift by underestimating a property's fair market value and selling it to a relative for a price below its fair market value.
• C)The statutory exemption from the gift tax for payments for medical care requires that the payment be made for a relative.
• D)All of the above are false.

---

Definitions:

Marginal Cost

The extra charge incurred when making one more unit of a good or service.

Marginal Revenue

The additional income received from selling one more unit of a product.

Marginal Cost

The additional financial outlay required for producing another unit of a product or service.

Maximizes Profits

A strategy or condition where a business adjusts its operations, production, and pricing to achieve the highest possible financial gain.