In February of This Year, Tom Dies

question 78

Multiple Choice

In February of this year, Tom dies. Two years and nine months before the date of death, Tom made a gift of stock valued at $2 million. Gift taxes paid on the transfer by Tom were $435,000 after reduction for a $345,800 unified credit ($780,800 - $345,800) . At the time of his death, the gifted stock was valued at $2.3 million. The amount included in Tom's gross estate from this transfer is

• A) $435,000.
• B) $2,000,000.
• C) $2,300,000.
• D) none of the above

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Definitions:

Break-Even Sales

The amount of revenue from sales needed to cover all fixed and variable expenses, at which point a business neither profits nor loses money.

Contribution Margin Ratio

A financial metric indicating the portion of sales revenue that is not consumed by variable costs, represented as a percentage of total sales.

Monthly Fixed Expense

Regular, unchanging expenses that occur on a monthly basis, such as rent or salaries, regardless of business activity levels.

Target Profit

The amount of net income a company aims to achieve for a specified period as part of its financial and operational goals.