Federal Gift Tax

Question 1

to qualify for minority interest discount

Answer 1

number of closely held shares must be less than a controlling interest

Question 2

“qualified” interest

Answer 2

receiving a fixed amount that will not fluctuate and can’t be manipulated

Question 3

gift tax implications of a GRAT

Answer 3

present value of the remainder interest

Question 4

income interest of a 2503(b) trust

Answer 4

qualifies for the gift tax annual exclusion

Question 5

would a gift of a remainder interest of a 2503(b) trust qualify for annual exclusion?

Answer 5

no, only income interest

Question 6

future interest gifts - gift tax return filed?

Answer 6

yes

Question 7

Last year, Nate established an irrevocable trust and funded it with his portfolio of income-producing stock valued at $440,000. The trust provides that the trustee is to pay Nate 6.5% of the initial value of the trust annually for a period of 15 years. After the 15-year term, the trustee is to pay the remaining assets in the trust to Nate’s daughter, Karen.

Is this a qualified interest for chapter 14 purposes?

Answer 7

Yes. He is receiving a fixed percentage of income from the trust for a number of years.

Question 8

Remainder interest of 2503(b) trust

Answer 8

Does NOT qualify for the gift tax exclusion.

Question 9

Wife gives husband a life estate in her seaside cottage valued at $50,000 and did not make a QTIP election.

Estate tax implications?

Answer 9

Not included in the husband’s gross estate, since the QTIP election wasn’t made. Will be included in the wife’s estate.