A Applicable Credit Is Subtracted in Calculating Both the Gift

question 74

Multiple Choice

A applicable credit is subtracted in calculating both the gift tax and the estate tax.Why doesn't this calculation have the effect of increasing the total applicable credit amount?

• A) The tentative estate tax is reduced by only taxes payable on adjusted taxable gifts rather than gross gift taxes.
• B) The applicable credit only offsets the exemption equivalent.
• C) The applicable credit cannot be used to offset gift taxes on adjusted taxable gifts.
• D) The applicable credit varies in amount from year to year.
• E) None of the choices are correct.

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Definitions:

Transnational Corporation

is a large company that operates and invests in multiple countries, often having a centralized headquarters but managing production or service facilities worldwide.

Global North

A term used to describe the world's wealthy, industrialized countries, predominantly located in the Northern Hemisphere.

Global South

A term used to describe countries considered to be in a relatively disadvantaged economic position compared to those in the Global North, often encompassing nations in Latin America, Africa, and parts of Asia that face development challenges.

Negligence Per Se

A legal doctrine establishing negligence due to the violation of a law or statute that is intended to protect the public from harm.