The Computation of the Gift Tax Liability for a Current

question 26

Multiple Choice

The computation of the gift tax liability for a current year

• A)is made without reference to previous years.
• B)requires the use of current-year tax rates only.
• C)requires the use of different rates, depending on when the gifts were made.
• D)requires knowledge of the total gift taxes paid in previous years.

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Definitions:

Sole Proprietor

An individual who owns and operates a business alone, without forming a corporation or a partnership.

Automatically

Occurring or operating without explicit intervention, as in processes designed to happen without human initiation.

Business Profits

Business Profits represent the excess of revenues over the expenses of running a business, indicating the financial success and viability of the business operations.

Personal Income

The total amount of money earned by an individual from all sources before taxes and other deductions.