Match Each Statement with the Correct Choice

question 20

Multiple Choice

Match each statement with the correct choice. Some choices may be used more than once or not used at all.
-A gift will cause income tax consequences to the donor.

• A)Step-up in basis
• B)Step-down in basis
• C)Gift of installment notes receivable
• D)Gift of property that has § 1245 or § 1250 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:

Vendor Allowances

Vendor allowances are funds provided by suppliers to a retailer for various promotional activities aimed at increasing the sale of their products.

Carrying Cost

The total cost of holding inventory, including storage, insurance, taxes, opportunity costs, and depreciation, over a certain period of time.

Goods Sold

Refers to products that have been sold and transferred from the seller to the buyer.

Cash Purchase Discount

A reduction in the amount paid for goods or services in exchange for paying in cash rather than credit.