Which of the Following Transactions Constitutes a Completed Gift Made

question 82

Multiple Choice

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

• A) Ellen reimburses her granddaughter $15,000 for her tuition at medical school.
• B) Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year.
• C) Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable.
• D) Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year.

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Definitions:

Taxed

Subject to a compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization.

Formal Agreement

A legally binding contract or document established between two or more parties, outlining specific terms and conditions that are enforceable by law.

Distributorship

A type of franchise in which the franchisor manufactures a product and licenses a dealer to sell the product in an exclusive territory.

Franchisor

A person or company that grants the license to a third party for the conducting of a business under the franchisor's marks and methods.