Match Each Statement with the Correct Choice

question 4

Multiple Choice

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-Decedent owned Roth IRA that has appreciated.

• A)Step-up in basis
• B)Step-down in basis
• C)Gift of installment notes receivable
• D)Gift of property that has potential for recapture of depreciation
• E)Donor's basis on date of gift appreciated property given, no gift tax due)
• F)The amount of the deceased spouse's taxable estate does not change
• G)Fair market value on date of gift
• H)Expected surviving spouse is in good health and 10 years younger
• I)No income tax consequences to the beneficiary
• J)Income in respect of a decedent IRD)
• K)No correct choice is given

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Definitions:

Tax Credit

An amount subtracted from the income tax owed; the most popular credits are the Child Care Tax Credit and the Earned Income Credit.

Taxable Income

The amount of an individual's or corporation's income used to determine how much tax is owed, calculated as gross income minus deductions and exemptions.

Energy-Efficient Furnace

A heating system designed to use less energy for the same level of heating comfort compared to less efficient models.

Exemption

Information included on tax forms that lowers taxes; exemptions include dependents as well as the taxpayer.