In Which,if Any,of the Following Independent Situations Has Fred Made

question 23

Multiple Choice

In which,if any,of the following independent situations has Fred made a gift?

• A)Fred established a revocable trust,income payable to himself for life and,upon his death,remainder to his children.
• B)Fred dies owning a U.S.savings bond with ownership listed as: "Fred,payable to Sue on Fred's death." Sue redeems the bond.
• C)Fred sends $25,000 to Alice's oral surgeon in payment of her dental implants.Alice is Fred's sister and does not qualify as his dependent.
• D)Fred pays Eva $800,000 in a property settlement of her marital rights.One month later Fred and Eva are divorced.
• E)None of the above.

---

Definitions:

Compounded Semi-Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods on a semi-annual basis.

Annuity

A financial instrument that provides a consistent series of payments to a person, mainly serving as a source of income for individuals who have retired.

Compounded Monthly

Interest on an investment or loan that is calculated at the end of each month and then added to the principal sum, increasing the amount on which future interest is calculated.

RRSP

Registered Retirement Savings Plan, a Canadian financial account designed for retirement savings, offering tax benefits.