Question

What techniques represent some tax-oriented advantages of gifting?

A. a donor can use an annual exclusion to reduce the value of a taxable, present-interest gift
B. gift-splitting is available to a married couple to reduce the value of a taxable gift
C. the unified credit must be used to offset taxes on inter-vivos taxable gifts that do not exceed the exemption equivalent amount
D. all of the above

Answer 1

The tax-oriented advantages of gifting include the use of annual exclusion, gift-splitting for married couples, and the unified credit

Step-by-step explanation:

The tax-oriented advantages of gifting can be represented by several techniques. These include:

1. A. A donor can use an annual exclusion to reduce the value of a taxable, present-interest gift: Each year, an individual can gift up to a certain amount (currently $15,000) to another person without the need to report the gift or pay any gift tax.
2. B. Gift-splitting is available to a married couple to reduce the value of a taxable gift: If both spouses agree, they can split the gift and each spouse can treat the gift as if it was made equally by both.
3. C. The unified credit must be used to offset taxes on inter-vivos taxable gifts that do not exceed the exemption equivalent amount: The unified credit is a credit that can be used to offset the gift tax owed on taxable gifts. It is based on the exemption equivalent amount, which is currently $11.7 million.

Therefore, the correct answer is D. all of the above