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Features common to gift tax formula and the estate tax formula

1. Identify the features common to the gift tax formula and the estate tax formula.
2. What is the lifetime gift tax exemption in tax year 2012? What is that exemption amount in 2013?
3. What is gift tax? Identify two types of transfers (for inadequate consideration) that are specifically excluded from imposition of the gift tax.
4. Describe the unified credit and the purpose it serves in the gift and estate tax.
5. How easy is it for an S corp to be converted back to a C corporation status?
6. What is the definition of active participation? How is it different from "material" participation?
7. Examples of de minimis fringe benefit?
8. What is considered active participation in a rental property?

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1. Identify the features common to the gift tax formula and the estate tax formula.
An estate tax is basically a tax on the amount transferred to you at the time of someones death. The tax amount is calculated by a formula made of of 3 parts
1. Taxable estate =The Gross estate minus the deductions and liabilites
2. Tentative tax =Tax rate x taxable estate
3. Tax Payable = The tentative tax minus the applicable credit

Gift Tax.
Gifts under $13,000 within the year are not taxed. Here is a helpful link I found that gives you specifics on the gift tax bracket http://www.floridatax.com/Tax%20Tables/Table_Estate_and_Gift_Tax_Rates.html

2. What is the lifetime gift tax exemption in tax year 2012? What is that exemption amount in 2013?
Until December 31, 2012 the tax exemption for gift and estate tax is 5 million dollars. On January 1, 2013 this will drop to 1 million dollars.

3. What is gift tax? Identify two types of transfers (for inadequate consideration) that are specifically excluded from imposition of the gift tax.
According to the IRS a gift tax is ...

Solution Summary

The expert identifies the features common to gift tax formulas and the estate tax formulas. What is considered active participation in a rental property is determined.

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