Mr Lee Made the Following Transfers This Year

question 50

Multiple Choice

Mr. Lee made the following transfers this year. Which of the transfers are treated as gifts for federal tax purposes?

• A) Political contribution to the Democratic party
• B) Charitable contribution to the United Way
• C) Payment to a hospital for the medical expenses of his 39-year old son
• D) None of the above are treated as gifts.

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Definitions:

Equity Method

A method of accounting for an investment in common stock by which the investment account is adjusted for the investor’s share of periodic net income and cash dividends of the investee.

Equity Method

An accounting technique used to record an investor's proportional share of the profits and losses of an equity-invested company.

Stock

Shares of ownership of a corporation.

Brokerage Commission

A fee charged by a broker for executing a transaction or providing specialized services.