Chapter 5

Question 1

The exclusion applies to gifts made:

Answer 1

1. during the life of the donor (inter vivos gifts)

2. transfers that take effect upon the death of the donor (bequests and inheritances)

Question 2

The courts have defined a gift as:

Answer 2

“a voluntary transfer of property by one to another without adequate [valuable] consideration or compensation therefrom.”

Question 3

To qualify as a gift, the payment must be made:

Answer 3

“out of affection, respect, admiration, charity or like impulses.”

Question 4

What was the ruling in the landmark case, Commissioner v. Duberstein?

Answer 4

Duberstein was required to include the fair market value of the automobile in gross income.

Question 5

Congress has allowed the recipient of a gift to exclude the value of __________ from gross income.

Answer 5

property