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.

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Definitions:

Fine

A monetary penalty imposed by an authority on individuals or entities as punishment for violating laws or regulations.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good that suppliers are willing and able to sell, usually upward-sloping.

Variable Costs

Costs that vary directly with the level of production output, such as raw materials and hourly labor expenses.

Output

The quantity of output generated by an individual, device, or sector.