Classify Each Statement Appearing Below

question 85

Short Answer

Classify each statement appearing below.
a. No taxable transfer occurs
b. Gift tax applies
c. Estate tax applies
-Howard establishes a trust, life estate to his children, remainder to the grandchildren. Under its terms, the trust is revocable by Howard.

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Definitions:

Cash Flow Per Share

A measure of a firm's financial flexibility, calculated as operating cash flow divided by the number of outstanding shares.

Prohibited

Actions or activities that are not permitted or allowed by law, regulation, or policy.

Basic Earnings

Earnings calculated by dividing the net income by the total number of outstanding shares, showing the profit earned per share.

Price/Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, commonly used by investors to determine stock attractiveness.