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GiftLaw Pro Home   >  Chapter 1 - Taxation and Giving  >  1.2 Gift Tax Deductions  >  1.2.1 Gift Tax Overview  >  Basic Quiz

Basic Quiz - 1.2.1 Gift Tax Overview

1. Any outright transfers, transfers in trust, direct transfers, and indirect transfers of real, personal, tangible and intangible property are potentially subject to gift tax.
           
2. If a gift of property is made, the fair market value of the property shall be considered the amount of the gift.
           
3. Where property is transferred to a person for less than full and adequate consideration, the amount of the gift is the fair market value of the property transferred.
           
4. A donor must pay gift tax at the applicable gift tax rate if the gift is over $3,000.
           
5. The Tax Code provides an unlimited gift tax deduction for gifts to charity and to spouses.
           
6. The Tax Code provides an unlimited gift tax deduction for gifts to children and grandchildren if they are under the age of 24.
           
7. If a gift is in excess of the annual exclusion and the available gift exemption, then gift tax most likely will be due.
           
8. Because gift tax is imposed on the value of property transferred, many donors wish to discount the value of such property for gift tax valuation purposes.
           
9. Family limited partnerships (FLPs), limited liability companies (LLCs) and grantor retained annuity trusts (GRATs) are popular methods for reducing values for gift and estate tax purposes.
           
10. Generally, gift tax audits by the Internal Revenue Service focus on the validity of the valuation discounts taken by taxpayers.