Tuesday, May 7, 2024
Taxation and Giving

1.5.3 Basic Quiz -- Valuation Discounts
Because gift tax is imposed on the value of property transferred, many donors wish to minimize the value of such property for gift tax valuation purposes.
     True      False
Because income tax deductions are based upon the value contributed to charities, many donors wish to maximize the valuation of property transferred to charities.
     True      False
Family limited partnerships (FLPs), limited liability companies (LLCs) and grantor retained annuity trusts (GRATs) are popular methods for reducing values for gift and estate tax purposes.
     True      False
Today, most gift tax audits by the Internal Revenue Service focus on valuation issues and the validity of the valuation discounts taken by taxpayers.
     True      False
Gifts of closely held C corporation stock may produce a valuation discount.
     True      False
S corporations are similar to C corporations in that they both have limited liability protection and two layers of taxation.
     True      False
LLCs are taxed like a partnership, yet have the liability protection of a corporation.
     True      False
An excellent way to get a "double discount" is to combine a FLP or LLC with a charitable lead trust (CLT).
     True      False
A gift of an undivided interest in real property is a nondeductible partial interest gift.
     True      False
A gift of an undivided interest in property to a charity may cause the donor's income tax deduction to be reduced.
     True      False



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