Paula makes the following gifts in the current year: $ 20,000 to the United Way; $ 15,000 to her brother Skip, who is a compulsive gambler; $ 45,000 to her husband Larry, to fund a new boat; and $ 32,000 to a UTMA account for her son Philip. To what extent will these be taxable gifts? That is, to what extent do they exceed the annual exclusion and begin to offset the unified credit?
Answer to relevant QuestionsList five examples of tax favored investments. a. Do these investments bear high implicit taxes? b. Who should undertake these investments? Do they? c. Who receives the implicit taxes? Taxpayer A purchased $ 100,000 of corporate bonds yielding 12.5% per annum; the interest income from these bonds is taxed at a rate of 28%. Taxpayer B purchased $ 100,000 of municipal bonds yielding 9% per annum. The ...Provide an example of a tax rule designed to motivate a socially desirable activity that also motivates transactions that reduce a taxpayer’s tax liabilities but serve no social purpose. Why do the tax laws sometimes discriminate against related party contracts? Is this always in society’s best interest? Suppose your parents founded a wildly successful business in which they still own 90% of the outstanding stock, which is the source of most of their wealth. The basis in their stock is close to zero. Your parents are nearing ...
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