Which of the Following Statements Relating to the Federal Gift

question 214

Multiple Choice

Which of the following statements relating to the Federal gift tax is incorrect?

• A) The deemed paid credit allowed for a prior taxable gift cannot be less than the gift tax that was actually paid.
• B) The issuance of an effective disclaimer by an heir will pass the property to another without being subject to the Federal gift tax.
• C) The annual exclusion is not available for gifts of future interests.
• D) Up to 5 years of annual exclusions can be available for gifts involving § 529 plans (qualified tuition programs).
• E) None of the above.

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Definitions:

Opportunity Cost

The cost of missing out on the next best alternative when making a decision or choice.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Benefit

An advantage or profit gained from something.

Foregone Benefit

The lost potential gain from other alternatives when one alternative is chosen.