In January 2005, the only gratuitous transfer David made was to his son, Sonny. David gave Sonny
Question:
In January 2005, the only gratuitous transfer David made was to his son, Sonny. David gave Sonny a diamond watch. At the time of the transfer, the fair market value of the diamond watch was $5,000. Sonny immediately sold the diamond watch for $5,000. Sonny used the proceeds from the sale of the watch to co-purchase a boat with David, who also contributed $5,000 cash. They held the boat as joint tenants with rights of survivorship. In January 2009, David died. As a result of David's death, Sonny became the outright owner of the boat, which was valued at $8,000 on the date of David's death. Will any amount be includable in David's gross estate as a result of these transactions?
A. No inclusion
B. $4,000
C. $5,000
D. $8,000
E. $10,000
South Western Federal Taxation 2017 Comprehensive
ISBN: 9781305874169
40th Edition
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young