Classify Each Statement Appearing Below

question 152

Short Answer

Classify each statement appearing below.
a. No taxable transfer occurs
b. Gift tax applies
c. Estate tax applies
-Van takes out an insurance policy on Myrna's life and designates himself as the beneficiary. Myrna is Van's wife. Two years later, Myrna dies, and Van collects the insurance proceeds.

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Definitions:

Market Price

The price at which an asset or service can be bought or sold in a given market.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health of the business.

Company

An organization created by several individuals for the purpose of running and managing a business, which can be either commercial or industrial in nature.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations by dividing current assets by current liabilities.