- Tax Planning
- Investments 1: Before you Invest
- Investments 2: Your Investment Plan
- Investments 3: Securities Market Basics
- Investments 4: Bond Basics
- Investments 5: Stock Basics
- Investments 6: Mutual Fund Basics
- Investments 7: Building Your Portfolio
- Investments 8: Picking Financial Assets
- Investments 9: Portfolio Rebalancing and Reporting
- Retirement 1: Basics
- Retirement 2: Social Security
- Retirement 3: Employer Qualified Plans
- Retirement 4: Individual and Small Business Plans
- Estate Planning Basics
- Introduction
- Understand the Principles of Estate-Planning
- Understand the Importance of Estate Planning and the Goals of Estate Planning
- Understand the Estate-Planning Process
- Know How Trusts Can Be Used to Your Advantage in Estate Planning
- Understand the Importance of Wills and Probate Planning
- Summary
- Assignments
Case Study #3 Answer
A. There will be a gift tax as the amount is $4,000 in excess of the $26,000 maximum transferable each year ($13,000 per individual). A gift tax form will need to be filled out. The gift tax before exclusions will be 4,000 * .18% = $720.
B. Their son will not have to pay any income tax because recipients of a gift do not have to pay tax on the gift. They do have to pay tax on future income though, but not directly on the gift.
C. Providing needed income to a friend, reducing the donor’s estate taxes, recipient is not taxed, helps avoid probate as gifted assets no longer belong to the donor.
