Samuel Owns Some Land, Which Has an Oil Deposit Underneath

question 22

Multiple Choice

Samuel owns some land, which has an oil deposit underneath it. His annual royalties vary from $50,000 to $60,000. Because Samuel is in the highest marginal tax rate bracket, he would like to have some (or all) of the royalty income taxed to his son, Jack, thus lowering the overall tax on the royalty income. To do this
I.Samuel can gift part of the land to Jack.
II.Samuel can gift part of each year's royalties to Jack.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

---

Definitions:

Five-Day Week

A work schedule that typically consists of five eight-hour days, totaling 40 hours, usually from Monday to Friday.

Biweekly Salaries

Salaries that are paid every two weeks, totaling 26 payments over the course of a year.

Payday

Payday refers to the specific day on which an employer distributes wages or salaries to employees.

Fiscal Period

A specific period of time used by governments and businesses for accounting and financial reporting purposes.