Which of the Following Transactions Constitute Gifts for Tax Purposes

question 53

Multiple Choice

Which of the following transactions constitute gifts for tax purposes?

• A) A payment of $22,000 to cover the expenses of a 22-year-old daughter's wedding.
• B) A gift of $100,000 to a political organization.
• C) A gratuitous transfer to a revocable trust of $1 million, with a life estate to the grantor's sister, with remainder to a grandchild.
• D) A year-end bonus of $15,000 to the vice-president of finance from the majority shareholder.

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Definitions:

Successive Approximations

A technique in behaviorism used to shape behavior by rewarding actions that are progressively closer to the desired behavior.

Shaping Behavior

A method in operant conditioning involving the reinforcement of successive approximations to a desired behavior.

Reinforcing

In behavioral psychology, it pertains to strengthening a behavior by providing a consequence that is rewarding, thereby increasing the likelihood of the behavior's recurrence.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, leading to learned responses.