Question

The ______________ (labeled the "death tax" by its opponents) and ______________ are based on the fair market values of wealth transfers made upon death or by gift, respectively.

Options:
A) Estate Tax, Gift Tax
B) Income Tax, Property Tax
C) Excise Tax, Sales Tax
D) Corporate Tax, Capital Gains Tax

Answer 1

The 'death tax' is the Estate Tax, and the tax based on gifts is the Gift Tax; both apply to wealth transfers either upon death or during life.

Step-by-step explanation:

The taxes labeled the "death tax" by its opponents and based on the fair market values of wealth transfers made upon death or by gift are the Estate Tax and Gift Tax, respectively. The Estate Tax is imposed on property transferred upon death, with estates valued below a certain threshold being exempt. In 2022, for example, the estate tax applied only to inheritances over $12.06 million. The Gift Tax, on the other hand, applies to donations of money or property made during an individual's life and is paid by the donor. These taxes aim to prevent wealthy individuals from avoiding taxes through the transfer of their estates during life or at death.