Stacey Inherits Unimproved Land (Fair Market Value of $6 Million)

question 101

Multiple Choice

Stacey inherits unimproved land (fair market value of $6 million) from her father on June 1, 2015. Stacey disclaims her interest in the property as follows: one-third on December 1, 2015; one-third on January 3, 2016; and the remaining one-third on May 31, 2016. In all cases, the disclaimers pass the interest to her son (the next heir under state law) . The Federal gift tax applies to Stacey for:

• A)All of the disclaimers.
• B)The disclaimer made in 2015.
• C)The May 31, 2016 disclaimer.
• D)All of the disclaimers made in 2016.
• E)None of the disclaimers.

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Definitions:

Price Discrimination

A pricing strategy where the same product or service is sold at different prices to different customers, based on market segment, purchase volume, or other factors.

Monopoly Markets

Markets in which there is only one supplier of a unique product or service, giving the supplier significant control over price and market conditions.

Perfectly Competitive Markets

Markets where there are many buyers and sellers, all products are identical, and no single buyer or seller can influence the market price.

Marginal Cost

The augmentation in complete cost associated with the production of an additional unit of a product or service.