Estate

Question 1

Sam and gloria bought a home
For 50 k, community proprty state. When it was worth 300k, sam died. 4 years later she sold it for 750k. What amount of cap gain will she report?

Answer 1

200k

Step up in basis, 300k
450k gain - 250 exclusion

Question 2

Justifications of the most appropriate property to gift or sell

Highly appreciate property

Answer 2

Good to gift to charity or donee in a lower tax bracket
May want to keep it until death to get a step up in basis (estate tax vs cap gain tax)

Question 3

Justifications of the most appropriate property to gift or sell

Property likely to appreciate

Answer 3

Good to gift to remove future growth from donors estate

Question 4

Justifications of the most appropriate property to gift or sell

Income producing property

Answer 4

Good to gift only if donee is in a lower tax bracket

Question 5

Justifications of the most appropriate property to gift or sell

Loss property

Answer 5

Sell to take a loss and then gift the proceeds from the sale

Question 6

Justifications of the most appropriate property to gift or sell

Out of state property

Answer 6

Gift to avoid ancilary probate

Question 7

Justifications of the most appropriate property to gift or sell

Property subject to depreciation

Answer 7

Keep property until fully depreciated

Question 8

Justifications of the most appropriate property to gift or sell

Fully depreciated property

Answer 8

An excellent gift using the gift lease back technique

Question 9

Justifications of the most appropriate property to gift or sell

Life insurance

Answer 9

Excellent to gift
Valued at replacement value but blossoms to face value

Question 10

Your aunt buys prpprty for 2016000. Four years later, when property values have declined, she gifts it to you for 1516000. Paying 600k in gift taxes(used fulll exemption already) if you sell the property two years later for 1416000 what is the amount of taxable gift?

Answer 10

1500000

Value of the gift is the fmv on the date of the gift less exclusion.