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TRUE OR FALSE

1.Gift taxation was enacted to discourage individuals from transferring their property during their lifetime to avoid an estate tax.

2.The gift tax is imposed on the person who gives the property.

3.A gift tax is not imposed on transferred property that is exempt from federal income taxation, such as municipal bonds.

4.Currently, an individual can make present-interest gifts of up to $14,000 every year tax free to an unlimited number of donees.

5.One advantage of gifting property is that the post gift appreciation in value will be excluded from estate taxation.

6.Gift splitting means that an individual donor will split the gift among several donees, rather than giving to just one donee.

7.If a taxable gift by a spouse to a third party is to be treated as a split gift, both spouses must consent on the gift tax return of the donor-spouse.

8.The gift of a life insurance policy will always qualify for the annual gift tax exclusion, whether the policy is transferred outright or to a trust.

9.When a gift is made in trust, the trust is considered the donee.

10.Substantial gifts to minors are generally more likely to be made in trust rather than under the Uniform Gifts to Minors Act.

11.The Uniform Gifts to Minors Act allows gifts of all types of property to minors to qualify for the annual gift tax exclusion.

12. Only a few states have adopted the Uniform Transfers to Minors Act.

13.If certain requirements are met, an individual may give unlimited property to a spouse who is a U.S. citizen without incurring any gift tax and without filing a gift tax return.

14.It is possible to give a spouse a qualifying terminable interest in property and have the gift qualify for the marital deduction.

15.When a gift is made to a qualified charity, there is a gift tax charitable deduction equal to the fair market value of the gift reduced by the annual exclusion.

16.Every individual has two transfer tax credits one is applied against gift tax and the other against estate tax.

17.A future-interest gift requires that a gift tax return be filed regardless of the value of the gift.

18.Assuming there are no future-interest gifts, no gift tax return is currently required until a present-interest gift to one individual in a calendar year exceeds $14,000.

19.The treatment of a transaction for income tax purposes is always consistent with its gift tax consequences.

20.The donee generally receives a basis in gifted property equal to the fair market value of the property at the time of the transfer.

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