Question

alma gives $100,000 worth of publicly-traded stock to her son murdoch to buy his love and affection. murdoch does not want to accept the gift and writes a letter to his mother the week after receiving the stock indicating his refusal. he sends the letter and the stock certificates issued in his name back to his mother. this is an example of what estate planning mechanism? a. gift-splitting b. the annual exclusion c. the charitable deduction. d. a qualified disclaimer.

Answer 1

The estate planning mechanism in this scenario is a qualified disclaimer, which allows a person to refuse an inheritance or gift without incurring tax liability.

Step-by-step explanation:

The estate planning mechanism in this scenario is a qualified disclaimer. A qualified disclaimer is a legal tool that allows a person to refuse an inheritance or gift, transferring the asset to another person without incurring any gift or estate tax liability. In this case, Murdoch wrote a letter to his mother, indicating his refusal to accept the gifted stock, and returned the stock certificates. By doing so, he effectively disclaimed the gift.