During 2012, Franklin, who is single, made the following gifts (all
outright gifts, no...

During 2012, Franklin, who is single, made the following gifts (all
outright gifts, no trusts):
â€¢ Property worth $1,263,000 to his daughter
â€¢ $3,013,000 cash to his favorite grandchild
â€¢ Real estate worth $1,513,000 to his other favorite
grandchild
â€¢ A stock portfolio worth $713,000 to his brother
In prior years, Franklin had made taxable gifts totaling $5
million, which gifts included gifts to grandchildren totaling $3
million. Franklin has applied $2,120,000 of his GST exemption to
his prior yearsâ€™ gifts to grandchildren. Determine the total
transfer tax due on these gifts, including GST, if
applicable.
How much GST exemption does Franklin have remaining to apply to
this year's gifts to grandchildren?
Referring to the technical terminology used in computing the
generation-skipping tax, what is the inclusion ratio applicable to
this year's gifts to grandchildren, assuming that all of Franklin's
remaining GST exemption is applied to these gifts?
Referring to the technical terminology used in computing the
generation-skipping tax, what is the applicable rate applicable to
this year's gifts to grandchildren, assuming that all of Franklin's
remaining GST exemption is applied to these gifts?
What is the generation-skipping tax applicable to this
scenario?
What is the gift tax applicable to this scenario?
A.
The applicable rate is 0%, the inclusion ratio multiplied by the
maximum transfer tax rate for the year in question
B.
The applicable rate is 35%, the inclusion ratio multiplied by the
maximum transfer tax rate for the year in question
C.
The inclusion ratio is $0/$4,500,000, or 0%
D.
$525,000
E.
The inclusion ratio is $4,500,000/$4,500,000, or 100%
F.
$1,575,000
G.
The applicable rate is 11.6667%, the inclusion ratio multiplied by
the maximum transfer tax rate for the year in question
H.
$815,500
I.
$3,000,000
J.
$999,250
K.
$0
L.
The inclusion ratio is $1,500,000/$4,500,000, or 33.333%