Taxable transfers, Cost Accounting

Assignment Help:

Greta Grantor made $1 million of taxable gifts in 2009, the only taxable gifts she made prior to this year.  Greta was married on January 2nd of this year to Gerard Gold digger. Despite Gerard's objection to Greta's philanthropic ways, he signed a consent on a timely filed form 709 to split all gifts made by Greta during the current year. Greta made the following transfers in the current year.

  1. For his promise to marry and provide undying love and affection Greta promised to give Gerard $1 million the day before their marriage and they signed a contract reflecting the promises. She immediately contacted her financial institution and filled out the forms necessary to make the transfer and delivered the forms to her broker. The money was transferred to Gerard's account on the same day.
  2. Rent-free use of an office owned by Greta provided to her daughter Daria for the year out of which she will run her campaign for district attorney--rental value for this year--$48,000.
  3. Greta pays her daughter Julie's (age 16) tuition and lodging to attend the David Ledbetter golf academy for the summer. The total cost was $20,000 and Greta's hope the improved golf skills will assist Julie to ultimately receive a golf scholarship to a college or university.
  4. Greta pays $15,000 to Offwagon, Inc, to cover the expense of her ex-husband (she knows how to pick them) whom she divorced 18 months ago. The expense was for therapy to help him kick his addiction to methamphetamines.
  5. Greta paid $120,000 to her indigent sister. Her sister used the funds as follows: $10,000 for health insurance premiums, $20,000 for an automobile, and $90,000 to be used towards a first-time home purchase.
  6. Greta was named trustee of a trust created by her Mom during Mom's lifetime. The trust provided that all income would be distributed to Mom's children in equal shares annually. The trustee was also given the power over the principal of the trust as follows: "In addition, the trustee is given the power to distribute principal to any of my grandchildren, in the sole discretion of the trustee". Greta exercises the power in favor of her niece and distributes $50,000 to her niece to assist in paying the expenses of her first year at Harvard.
  7. When Gerard threatens to leave, Greta agrees to take out a life insurance policy on her life and names Gerard as beneficiary of the $500,000 death benefit. The first year's premium, $25,000, was paid by Greta, the policyowner, this year.
  8. Greta transfers $100,000 to local museum, a 501(c)(3) organization, and the museum places her name on a plaque in the hallway and gives her preferred special viewings of new exhibits with other top donors.
  9. Greta bought a condominium in Palm Beach worth $1.6 million and titled it tenancy by the entireties with Gerard. Greta paid the full purchase price in cash.
  10. Greta gives her son Harvey a Land Rover, fair market value 90,000 which she promised him three years ago only if he graduated magna cum laude from Yale Law School, which he recently did.
  11. Greta was recently informed by the executor of Mom's will that Mom's estate--Mom died 1 year ago--is eligible for a death benefit of $150,000 from her retirement plan. The executor was unaware of this asset until now. Greta, already filthy rich, wrote to the executor and refused this benefit. Since Greta was the only probate beneficiary, the benefit was divided by her three siblings in equal shares as required by the state intestacy statute.

Calculate Greta's taxable gifts for this year.  In your answer, you should address the issues of whether such transfers are

(a) Gifts for gift tax purposes,

(b) Taxable transfers (e.g. are exclusions or deductions available), and

(c) Eligible for gift splitting.


Related Discussions:- Taxable transfers

What is cmm, CMM is an internationally recognized standard for calculating ...

CMM is an internationally recognized standard for calculating the maturity of an organization's software development processes and has become the primary benchmark multinational co

Transaction affect the cash flows statement, If a company trades in a build...

If a company trades in a building towards a new building and does not recognize a gain or loss (because of code section 1031), will this transaction affect the cash flows statement

Relationship among management accounting and cost accounting, Relationship ...

Relationship among management accounting and cost accounting Referring to CIMA's definition for cost accounting, we can determine cost accounting is a part of management accou

Compute over and under absorption of variable overhead, Compute Over and Un...

Compute Over and Under Absorption of Variable and Fixed Overhead A company has a machine cost center for that the given information is available as a) Budget i. Budget

Cost accounting, raw an organization chart of any actual or hypothetical ma...

raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss

Explain the following types of costs, Explain the following types of costs....

Explain the following types of costs. a. Fixed and variable costs b. Explicit and implicit costs c. Direct and indirect costs d. Past and future costs e.

Absorbtion of overheads, interaction with an expert/cost accountant to kno...

interaction with an expert/cost accountant to know the overhead absorbtion policies and procedure followed

Weighted average method - work in progress, Weighted Average Method - Work ...

Weighted Average Method - Work in Progress While this method is employed, all costs of production are considered in assigning costs to inventory. The method puts together open

Give feasibility study and propose an electronic system, A small company em...

A small company employing around 25 people manufactures and sells anthropometric measuring equipment - equipment used mainly in hospitals to measure the height and other dimensions

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd