Tax Consulting Estate and Gift Tax

Question 1

What is the annual gift tax exclusion amount per recipient for 2024?

Accepted Answer

$18,000

Answer

The annual gift tax exclusion for 2024 is $18,000 per recipient, allowing donors to give this amount to any number of individuals without using their lifetime exemption.

Question 2

The federal estate tax exemption (unified credit equivalent) for 2024 is approximately:

Accepted Answer

$13.61 million

Answer

The federal estate and gift tax exemption is $13.61 million per individual in 2024, meaning estates below this threshold owe no federal estate tax.

Question 3

What is the 'step-up in basis' rule for inherited property?

Accepted Answer

Inherited property receives a new basis equal to fair market value at the date of death

Answer

Property inherited at death receives a stepped-up basis equal to its fair market value on the date of death, eliminating unrealized capital gains from the decedent's holding period.

Question 4

Which estate planning trust allows a surviving spouse to postpone estate taxes until the second spouse's death?

Accepted Answer

Qualified Terminable Interest Property (QTIP) Trust

Answer

A QTIP Trust qualifies for the unlimited marital deduction, deferring estate taxes until the surviving spouse's death while allowing the first spouse to control ultimate distribution of assets.

Question 5

What is 'portability' in the context of estate taxes?

Accepted Answer

A deceased spouse's unused estate tax exemption can be transferred to the surviving spouse

Answer

Portability allows the executor of a deceased spouse's estate to elect to transfer any unused estate tax exemption to the surviving spouse, effectively doubling the couple's total exemption.

Tax Consulting Practice Test

Tax Consulting Practice Test

Tax Consulting Estate and Gift Tax