Which of the Following Statements About the Federal Gift Tax

question 92

Multiple Choice

Which of the following statements about the federal gift tax is false?

• A)The tax is imposed on the donor.
• B)The tax is based on the fair market value of the gifted property.
• C)An individual can give away $5 million (adjusted for inflation)every year without being subject to tax.
• D)The donor's basis in the gifted property carries over to become the donee's basis.

Differentiate between the adequacy of consideration and the factors courts consider in evaluating it.

Understand the applications and limitations of the doctrine of promissory estoppel.

Distinguish between enforceable and non-enforceable promises based on the presence of consideration.

Recognize the legal implications of agreements lacking consideration, such as accord and satisfaction.

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Definitions:

Average Operating Assets

The average value of the assets utilized to generate revenue during a specific period, often calculated by averaging the beginning and ending asset values for the period.

Stockholders' Equity

The equity held by shareholders in a company, calculated as the company's assets minus its outstanding debts, representing their residual ownership.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding deductions of taxes and interest expenses.

Turnover

Turnover refers to the rate at which employees leave a workforce and are replaced, or the total volume of sales made by a company during a particular period.