Taxation Paper 1

1

Steve and Kay Briar, US citizens, were married for the entire 2012 calendar year. In 2012, Steve gave a $30,000 cash gift to his sister. The Briars made no other gifts in 2012. They each signed a timely election to treat the $30,000 gift as made one-half by each spouse. Disregarding the applicable credit and estate tax consequences, what amount of the 2012 gift is taxable to the Briars?






2

In 2012, Sayers, who is single, gave an outright gift of $50,000 to a friend, Johnson, who needed the money to pay medical expenses. In filing the 2012 gift tax return, Sayers was entitled to a maximum exclusion of






3

During 2013, Blake transferred a corporate bond with a face amount and fair market value of $20,000 to a trust for the benefit of her sixteen-year old child. Annual interest on this bond is $2,000, which is to be accumulated in the trust and distributed to the child on reaching the age of twenty-one. The bond is then to be distributed to the donor or her successor-in-interest in liquidation of the trust. Present value of the total interest to be received by the child is $8,710. The amount of the gift that is excludable from taxable gifts is






4

Under the unified rate schedule for 2013,






5

Which of the following requires filing a gift tax return, if the transfer exceeds the available annual gift tax exclusion?






6

On July 1, 2012, Vega made a transfer by gift in an amount sufficient to require the filing of a gift tax return. Vega was still alive in 2013. If Vega did not request an extension of time for filing the 2012 gift tax return, the due date for filing was






7

When Jim and Nina became engaged in April 2012, Jim gave Nina a ring that had a fair market value of $50,000. After their wedding in July 2012, Jim gave Nina $75,000 in cash so that Nina could have her own bank account. Both Jim and Nina are US citizens. What was the amount of Jimís 2012 marital deduction?






8

Raff created a joint bank account for himself and his friendís son, Dave. There is a gift to Dave when






9

Fred and Ethel (brother and sister), residents of a noncommunity property state, own unimproved land that they hold in joint tenancy with rights of survivorship. The land cost $100,000 of which Ethel paid $80,000 and Fred paid $20,000. Ethel died during 2013 when the land was worth $300,000, and $240,000 was included in Ethelís gross estate. What is Fredís basis for the property after Ethelís death?






10

Bell, a cash-basis calendar-year taxpayer, died on June 1, 2012. In 2012, prior to her death, Bell incurred $2,000 in medical expenses. The executor of the estate paid the medical expenses, which were a claim against the estate, on July 1, 2012. If the executor files the appropriate waiver, the medical expenses are deductible on






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