Chapter 12
A) Tia made a $100,000 gift to Rick.
Tia funds an irrevocable trust with $100,000, naming Vonda to receive income for life. Tia also grants Vonda a general power of appointment during her life. During the next year, Vonda directs the trustee to give $100,000 to Rick. Which of the following statements is not correct? A) Tia made a $100,000 gift to Rick. B) Vonda makes a $100,000 gift to Rick. C) Tia has made a gift of $100,000 to Vonda. D) Exercising a general power of appointment constitutes a gift.
B) $0.
Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is A) $1,000 gain. B) $0. C) $1,500 loss. D) none of the above
C) allows the donor an annual exclusion for transfers.
A Crummey trust A) provides the donor with the ability to retrieve the property. B) prohibits the beneficiary from withdrawing assets. C) allows the donor an annual exclusion for transfers. D) receives property that is not eligible for the annual exclusion.
C) requires distribution of trust assets to the beneficiary at age 21.
A Sec. "2503(c) trust" A) is a discretionary trust for a beneficiary of any age. B) is intended for beneficiaries over the age of 20. C) requires distribution of trust assets to the beneficiary at age 21. D) can be formed only by the parent(s) of the beneficiaries.
B) may reduce the amount of the taxable gifts of the donor-decedent.
A gift-splitting election A) requires each spouse to give property. B) may reduce the amount of the taxable gifts of the donor-decedent. C) results in a $7,500 per donee annual exclusion for each spouse. D) is binding on future years.
C) $75,000.
A husband transfers $90,000 by gift directly to his wife. The marital deduction for the transfer is A) $0 unless he elects to claim one. B) $90,000. C) $75,000. D) none of the above
C) qualifies for a charitable contribution deduction if the recipient charity receives a guaranteed annuity, which is a present interest.
A split-interest gift transfer A) involves two public (charitable) organizations. B) involves two present interests. C) qualifies for a charitable contribution deduction if the recipient charity receives a guaranteed annuity, which is a present interest. D) cannot qualify for a deduction if a future interest is given to a charitable organization.
A) $50,000.
Barbara sells a house with an FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of A) $50,000. B) $170,000. C) $120,000. D) $0.
B) a life estate.
Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Calvin's interest is A) a remainder interest. B) a life estate. C) a reversionary interest. D) a term certain.
A) a remainder interest.
Calvin transfers land to a trust. Calvin retains the right to the income from the land for the rest of his life. Upon his death, the land is to be transferred to his daughter, Melissa. Melissa's interest is A) a remainder interest. B) a life estate. C) a reversionary interest. D) a term certain.
C) a reversionary interest.
Calvin transfers land to a trust. His daughter Melissa will receive the income from the land for ten years. After ten years, the land is returned to Calvin. Calvin's interest is A) a term certain. B) a life estate. C) a reversionary interest. D) none of the above
C) $15,500.
Damitria transfers her rights in a $100,000 insurance policy on June 1 to Tremayne. The policy has a cash value of $9,000 and an interpolated terminal reserve of $8,500. The annual policy premium of $12,000 had been paid on January 1. Damitria's gift (before the annual gift tax exclusion) to Tremayne is A) $8,500. B) $9,000. C) $15,500. D) $20,500.
C) $40,000.
Ed gives Steve land with an adjusted basis of $40,000 and an FMV of $90,000. Ed paid no gift tax. Ed then inherits the same land back from Steve at Steve's death eight months later. At Steve's death, the land is worth $120,000. Ed's basis in the land becomes A) $120,000. B) $90,000. C) $40,000. D) cannot be determined from the facts given
A) Elaine is treated as having made a gift of the forgone interest on the $175,000 loan to Mike.
Elaine loaned her brother, Mike, $175,000 to purchase a new home. Elaine does not charge Mike any interest on the loan. What are the tax consequences to Elaine and Mike? A) Elaine is treated as having made a gift of the forgone interest on the $175,000 loan to Mike. B) Elaine only has to impute interest on $75,000 of the loan to Mike. C) If Mike has no net investment income, Elaine does not have to treat the forgone interest as a gift. D) Mike can deduct the interest that he is deemed to have paid Elaine.
D) George's transfer of property to the trust is a gift of a future interest.
George transfers property to an irrevocable trust for the benefit of his adult children and names himself as trustee. The trust document requires the trustee to distribute trust property to the beneficiaries at the trustee's discretion with the possibility of no distribution to certain beneficiaries as the trustee deems appropriate. The trust will terminate at the end of nine years, and the property will pass to George's children. Which of the following statements is correct? A) The beneficiaries receive a present interest in the trust property when George transfers the assets to the trust. B) The transfer by George is eligible for the annual gift tax exclusion. C) George's transfer of property to the trust is not taxed under gift tax rules at the date of transfer. D) George's transfer of property to the trust is a gift of a future interest.
A) $17,000
Gloria makes the following gifts during the year: $16,000 cash to her son, Andy Stock with a basis of $10,000 and a $31,000 fair market value to her sister, Helen $100,000 to a revocable trust benefiting her nephew, George Land with a basis of $60,000 and a fair market value of $50,000 to the American Cancer Society Before considering the unified credit, what are Gloria's taxable gifts? A) $17,000 B) $45,000 C) $95,000 D) $121,000
A) $100,000.
Gordon died on January 1 and by his will left land with an adjusted basis of $60,000 and an FMV of $100,000 to Becky. Becky disclaims the property on December 31 of the year of death, when the land was still worth $100,000. Becky has made a gift (before the annual gift tax exclusion) of A) $100,000. B) $60,000. C) $50,000. D) $0.
A) $0.
Greg transfers property on August 8 of the current year with an adjusted basis of $40,000 and an FMV of $90,000 to his ex-wife as a property settlement that is part of their divorce agreement. The property settlement agreement and the divorce were both finalized on June 3 of the current year. Greg has made a gift of A) $0. B) $40,000. C) $80,000. D) $90,000.
D) Hu has a charitable contribution deduction of $120,000 on his current gift tax return.
Hu makes a gift of his home to a local homeless shelter (a 501(c)(3) charity). Hu will retain his home for 10 years, after which the homeless shelter will take possession. The value of Hu's 10-year interest is $30,000 and the remainder interest is valued at $120,000. Which of the following statements is correct? A) Hu is allowed a charitable deduction on his gift tax return for $150,000 in the current year. B) Hu is allowed an exclusion of $15,000 on his gift of $120,000 to the charity. C) Hu is not allowed to deduct the contribution until the charity takes possession in 10 years. D) Hu has a charitable contribution deduction of $120,000 on his current gift tax return.
C) A trust for a minor (Sec. 2503(c) trust) must distribute all of its income currently in order to qualify for the annual exclusion.
Identify which of the following statements is false. A) A future interest includes reversions, remainders, and other interests, which are limited to commence in use, possession, or enjoyment at some future date or time. B) The gift tax exclusion is available only for a gift of a present interest. C) A trust for a minor (Sec. 2503(c) trust) must distribute all of its income currently in order to qualify for the annual exclusion. D) For a transfer made in trust, each beneficiary is deemed to be a separate donee.
A) A gift occurs when a revocable trust is funded.
Identify which of the following statements is false. A) A gift occurs when a revocable trust is funded. B) A gift does not occur until the transfer is complete. C) A transfer is incomplete (and not subject to the gift tax) if the donor retains the power to name new beneficiaries or to change the interests of the beneficiaries. D) Transfers to an irrevocable trust can be deemed incomplete.
C) The donee's payment of the gift tax does not reduce the amount of the gift because it is treated as consideration paid to the donor.
Identify which of the following statements is false. A) A power of appointment exists when a person transfers property and grants someone else the power to specify who eventually will receive the property. B) A person possesses a general power of appointment if the person has the power to appoint property to himself, his creditors, his estate, or the creditors of his estate. C) The donee's payment of the gift tax does not reduce the amount of the gift because it is treated as consideration paid to the donor. D) The donor must recognize as a gain the excess of the gift tax payable over the adjusted basis of the property.
A) Gift tax returns are due annually by April 15 following the year of the gift. No extensions are allowed.
Identify which of the following statements is false. A) Gift tax returns are due annually by April 15 following the year of the gift. No extensions are allowed. B) The donor pays the gift tax generally. C) Gift tax returns are filed on a calendar-year basis. D) Receipt of an extension of time for filing a gift tax return does not extend the due date for payment of the gift tax.
C) If a grantor transfers property in trust and names a beneficiary to receive only a term-certain interest and then the property is to return to the grantor, the transaction is not subject to gift tax.
Identify which of the following statements is false. A) If an individual transfers property in trust and reserves the right to the trust's income for life, the individual retains a life estate. B) An individual who receives a remainder interest will receive property after the death of the holder of a life estate. C) If a grantor transfers property in trust and names a beneficiary to receive only a term-certain interest and then the property is to return to the grantor, the transaction is not subject to gift tax. D) Life estates are valued using actuarial tables
B) The gift-splitting election is made separately on each gift either spouse makes
Identify which of the following statements is false. A) The gift-splitting election will apply to all transfers made during the portion of any year that the spouses electing gift splitting are married to each other. B) The gift-splitting election is made separately on each gift either spouse makes. C) Making gifts during one's lifetime helps to reduce the amount of estate taxes owed at death. D) In order to use gift splitting, both spouses must be U.S. citizens or residents at the time of the transfer.
C) The payment of premiums on an insurance policy that is owned by another does not constitute a gift.
Identify which of the following statements is false. A) The interpolated terminal reserve is similar to a life insurance policy's cash surrender value. B) A gift occurs when the owner of an insurance policy irrevocably assigns all ownership rights in the policy to another. C) The payment of premiums on an insurance policy that is owned by another does not constitute a gift. D) The value of the gift of a life insurance policy is the amount it would cost to purchase a comparable policy on the date of the gift.
A) The marital deduction for gift tax purposes is limited to one-half the value of the property transferred.
Identify which of the following statements is false. A) The marital deduction for gift tax purposes is limited to one-half the value of the property transferred. B) The marital deduction is generally allowed since the transfer remains within the economic (husband/wife) unit. C) The marital deduction for gift tax purposes is limited to the amount of the includible gift (e.g., the amount of the gift that is in excess of the annual exclusion). D) Transfers of community property are eligible for the marital exclusion.
D) All of the above are true.
Identify which of the following statements is true. A) A purpose of the annual exclusion is to eliminate the necessity of accounting for and reporting small gifts such as those made for weddings and Christmas. B) The gift tax exclusion is available only for a gift of a present interest. C) A present interest is an unrestricted right to the immediate use, possession, or enjoyment of property or the income from property. D) All of the above are true.
B) An individual can inadvertently make a gift by underestimating a property's fair market value and selling it to a relative for a price below its fair market value.
Identify which of the following statements is true. A) A taxable gift may occur when property is sold in an arm's length transaction for less than its FMV. B) An individual can inadvertently make a gift by underestimating a property's fair market value and selling it to a relative for a price below its fair market value. C) The statutory exemption from the gift tax for payments for medical care requires that the payment be made for a relative. D) All of the above are false.
C) One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property.
Identify which of the following statements is true. A) An individual making a qualified disclaimer can determine to whom the disclaimed property will pass. B) A qualified disclaimer must be made within six months after (a) the day the property is transferred, or (b) the day the person receiving the property becomes age 21, whichever is later. C) One of the tests that a qualified disclaimer must meet is that it must be an irrevocable, unqualified, written refusal to accept property. D) All of the above are false.
C) A statutory exemption from the gift tax is available for property transfers between divorced individuals when the divorce occurs during a three-year period beginning one year before the transfer agreement is made.
Identify which of the following statements is true. A) Cash paid directly to a medical school for room and board is a "qualified transfer" and not subject to the gift tax. B) Transfers by an individual to a political party constitute a gift subject to the gift tax rules. C) A statutory exemption from the gift tax is available for property transfers between divorced individuals when the divorce occurs during a three-year period beginning one year before the transfer agreement is made. D) All of the above are false
C) For transfer tax purposes, both the charitable contribution deduction and the marital deduction are unlimited.
Identify which of the following statements is true. A) If the annual exclusion for gifts is not used in the current year, the unused portion can be carried forward to subsequent years. B) Individuals may not give more than $14,000 per person in gifts each year before being taxed on the transfer. C) For transfer tax purposes, both the charitable contribution deduction and the marital deduction are unlimited. D) All of the above are false.
A) If the gifted property's FMV on the date of the gift exceeds its adjusted basis and the donor pays no gift tax, the donee's basis is the same as the donor's basis if the property is sold for a loss.
Identify which of the following statements is true. A) If the gifted property's FMV on the date of the gift exceeds its adjusted basis and the donor pays no gift tax, the donee's basis is the same as the donor's basis if the property is sold for a loss. B) Prospective donors should not dispose of property that has declined in value by selling it rather than gifting it. C) A $15,000 annual exclusion per donee is available for both gift tax and estate tax purposes. D) All of the above are false.
B) The creation of a joint tenancy by one person will result in a gift equal to the other joint tenant's pro rata interest in the property.
Identify which of the following statements is true. A) The creation of a joint bank account constitutes a taxable gift. B) The creation of a joint tenancy by one person will result in a gift equal to the other joint tenant's pro rata interest in the property. C) The naming of a life insurance policy beneficiary constitutes a gift for transfer tax purposes. D) Since municipal bond interest is exempt from federal income taxation, gifting the bonds escapes the gift tax.
C) Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base.
Identify which of the following statements is true. A) The gift tax is a wealth transfer tax that applies to transfers during a person's lifetime and transfers at death. B) The gift tax is not a part of the unified transfer tax system. C) Under the unified transfer tax system, taxable gifts made after 1976 are included in the donor's death tax base. D) All of the above are false.
C) A "Crummey demand power" in a trust document allows the donor to demand a distribution from the trust in years in which assets are transferred to the trust.
Identify which of the following statements is true. A) The trustee of a Sec. 2503(c) trust must distribute all of the corpus and accumulated income when the beneficiary reaches the age of 25. B) The gift tax exclusion is available for a gift of a present or future interest. C) A "Crummey demand power" in a trust document allows the donor to demand a distribution from the trust in years in which assets are transferred to the trust. D) All of the above are true.
B) The marital deduction is limited to the amount of the gift that exceeds the annual exclusion.
Identify which of the following statements is true. A) When making a QTIP transfer, the donor does not control who will receive the property on the death of the donee-spouse. B) The marital deduction is limited to the amount of the gift that exceeds the annual exclusion. C) Claiming the marital deduction on a QTIP transfer is mandatory. D) Terminal interests cannot be eligible for the marital deduction.
C) $200,000.
In 1998, Delores made taxable gifts to her son of property with an FMV of $200,000. In the current year when Delores dies, the property is worth $800,000. The amount included in Delores's estate tax base because of the 1998 gift is A) $0. B) $189,000. C) $200,000. D) $800,000
D) $1,600,000
In 2018, Letty makes taxable gifts totaling $4 million. Her only other taxable gifts amount to $1 million, all of which were made in 2012. What is Letty's 2018 gift tax liability before the unified credit? A) $2,220,800 B) $1,875,000 C) $1,840,800 D) $1,600,000
B) $6,000.
In November 1976, Grant uses $30,000 of the specific exemption available at that time. The unified credit available to Grant for post-1976 transfers is reduced by A) $0. B) $6,000. C) $15,000. D) $30,000.
C) $55,000.
In the current year, Bonnie, who is single, sells stock valued at $60,000 to Linda for $15,000. Later that year, Bonnie gives Linda $25,000 in cash. Bonnie's taxable gifts from these transfers total A) $70,000. B) $59,000. C) $55,000. D) $25,000.
D) $220,000
In the current year, Cesar, who is single, gives $26,000 to each of his 20 nieces and nephews for a total property transfer of $520,000. Cesar's taxable gifts total A) $520,000. B) $260,000. C) $300,000. D) $220,000
A) $130,000.
In the current year, Donna gives $50,000 cash and $30,000 of stock to Mike. She also gives $40,000 of tax-exempt bonds to Angela. Her husband, Andy, gives $200,000 of land to Angela. Assume the couple elects gift splitting for the current year. Donna's taxable gifts total A) $130,000. B) $148,000. C) $110,000. D) $60,000.
B) $535,000
In the current year, Melanie makes two transfers to Peter, her husband. In June, she gives him land valued at $50,000. In December, she transfers $500,000 to a trust with a bank named as trustee. All income must be paid to Peter monthly for life. At Peter's death, the property passes to their children. Compute the maximum marital deduction assuming Melanie makes the appropriate elections. A) $550,000 B) $535,000 C) $500,000 D) $50,000
B) may result in treating the borrower as paying interest.
Interest-free or below-market loans A) must always have interest imputed on them. B) may result in treating the borrower as paying interest. C) result in treating the entire loan proceeds as a gift. D) will always result in at least $1,000 of interest income being imputed.
A) A $300,000 gift occurs when the trust became irrevocable.
Jack transfers property worth $250,000 to a revocable trust on January 1. Two-and-a-half years later, when the property is worth $300,000, the trust becomes irrevocable. Which of the following statements is correct? A) A $300,000 gift occurs when the trust became irrevocable. B) A $250,000 gift occurs when the original transfer was made. C) A $250,000 gift occurs when the trust became irrevocable. D) Jack may elect which amount to report as a gift
C) Crummey trust.
Marilyn and Earl establish a trust benefiting their grandchild, Courtney, age 4. Courtney is to receive the accumulated income and corpus when she reaches age 30. In the year of the transfer, Courtney has a two-week period in which to request distributions. This trust is a A) 2503(c) trust. B) Clifford trust. C) Crummey trust. D) none of the above
B) a $4,000 loss.
Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes A) no loss. B) a $4,000 loss. C) a $14,000 loss. D) none of the above
A) Martha has made a gift to Ned of $100.
On April 1, Martha opens a joint bank account with Ned and deposits $1,000. Ned deposits $500 into the account on April 2. On May 2, Martha withdraws $750. Two days later, Ned withdraws $600. A) Martha has made a gift to Ned of $100. B) Ned has made a gift to Martha of $500. C) Martha has made a gift to Ned of $600. D) Martha has made a gift to Ned of $1,000.
D) Interest does not have to be imputed on the gift since the loan amount is less than $10,000 and does not have a tax avoidance motive
On January 1, Jeff loans his friend Patrick $7,000 to buy a used car. Patrick signs a noninterest-bearing demand note. The applicable interest rate is 5%. Which of the following statements is correct? A) Jeff has made a taxable gift to Patrick of $3,500. B) Jeff must report interest income of $3,500 from Patrick. C) Jeff has made a gift to Patrick that is not taxable since it is less than $11,000. D) Interest does not have to be imputed on the gift since the loan amount is less than $10,000 and does not have a tax avoidance motive
C) $12,000.
On July 1, Frank loans his brother Matt $200,000. The loan is evidenced by an interest-free demand note. The loan is still outstanding on December 31. The applicable interest rate is 12%. Frank is treated as having made a gift of A) $200,000. B) $24,000. C) $12,000. D) $0.
C) $3,000.
Vincent makes the following property transfers in the current year: • $5,000 tuition for a grandson paid directly to the school • $1,000 medical expense for a child paid directly to a hospital • $500 donation to the Democratic party • $10,000 property settlement in conjunction with a divorce • $3,000 room and board at college for a grandson paid directly to the school Vincent's gifts for the year before considering the annual gift tax exclusion total A) $19,500. B) $19,000. C) $3,000. D) $0.
B) $1,000 gain.
Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is A) $2,000 gain. B) $1,000 gain. C) $1,000 loss. D) none of the above
B) Juan purchases a ski chalet using his own funds, but listing Penelope as a joint owner.
Which of the following is a completed gift? A) Greta transfers $50,000 to a revocable trust benefiting her children Hans and Julio. B) Juan purchases a ski chalet using his own funds, but listing Penelope as a joint owner. C) Horatio transfers $60,000 to a bank account with Hazel. Hazel does not contribute any money to the account. D) Mike changes the beneficiary of his policy to Meredith.
D) Ida purchases a beach home, listing Mark as a joint tenant. Mark provides no consideration for the home.
Which of the following situations requires that a gift tax return be filed? A) George gives wife, Laura, a new car for her birthday. B) Yanisha makes gifts of $3,000 of present interest property to each of her nieces and nephews. C) Archie pays the hospital medical bills for his friend Paige. D) Ida purchases a beach home, listing Mark as a joint tenant. Mark provides no consideration for the home.
A) If the donor does not pay the gift tax, the donee is personally liable for the tax.
Which of the following statements is true? A) If the donor does not pay the gift tax, the donee is personally liable for the tax. B) When a married couple elects gift splitting, each spouse is potentially liable for 50% of the gift tax. C) Gift tax returns are due March 15 in the year following the gift. D) Donors can request an automatic extension of time to pay their gift tax even when they don't request to have an income tax extension.
A) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor
Which of the following statements is true? A) Transfers to an irrevocable trust can be deemed incomplete due to powers retained by the grantor. B) If the donor retains the power to change the trust beneficiary, the gift is complete. C) Transfers to a revocable trust are completed gifts. D) All of the above are false.
D) Ellen reimburses her granddaughter $15,000 for her tuition at medical school.
Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year? A) Ellen deposits $100,000 cash and Matt deposits $5,000 cash into a joint savings account. Matt does not withdraw anything during the current year. B) Ellen names Larry the beneficiary of a $100,000 life insurance policy on Ellen's life. The beneficiary designation is revocable. C) Ellen transfers property to a revocable trust, naming the bank as trustee. The trustee must pay out all the income to Ed over Ed's lifetime, beginning next year. D) Ellen reimburses her granddaughter $15,000 for her tuition at medical school.
D) Lance purchases land, titling it in the names of Lance and Sheryl, joint owners.
Which of the following transfers is subject to the gift tax? A) Matilda contributes $5,000 to a Senate candidate's political organization. B) Frank gives $30,000 to a lobbying group promoting stricter environmental regulations. C) Julia establishes a trust benefiting her nieces and nephews. Julia will determine the amount of any distributions made. D) Lance purchases land, titling it in the names of Lance and Sheryl, joint owners.
B) They are considered gifts of a present interest, permitting an annual gift tax exclusion.
Why are Crummey trusts popular for minors? A) They are considered gifts of a future interest and allow the donor to take an exclusion. B) They are considered gifts of a present interest, permitting an annual gift tax exclusion. C) Crummey trusts require annual distributions to minors. D) Donors are only subject to the gift tax when funds are distributed from Crummey trusts.
D) nine months after his date of death.
Roger makes a $1,000,000 cash gift on January 1 of the current year, and dies on February 1 of the current year. Roger's gift tax return is due A) April 15 of the current year. B) December 31 of the current year. C) April 15 of the next year. D) nine months after his date of death.
A) $30,000.
Sandra, who is married, creates an irrevocable trust in the amount of $200,000 for her 18-year-old daughter, Kelly. She names the bank as trustee. Before Kelly reaches age 21, the trustee may pay the income to Kelly. Kelly will receive any undistributed assets when she reaches age 21. If Kelly dies before age 21, the assets will be paid to her estate. In addition, Sandra creates an irrevocable trust for her son, Kevin, age 21. He is entitled to withdraw up to $30,000 per year. Sandra contributes $30,000 in the current year. Sandra elects gift splitting with her husband. Her husband makes no gifts in the current year. Sandra's annual exclusions to be claimed on her gift tax return total A) $30,000. B) $15,500. C) $12,000. D) $0.
A) $5,000.
Steve gave stock with an adjusted basis of $7,000 and an FMV of $10,000 to Alice. No gift tax was paid. Later, Alice sold the stock for $12,000. The gain Alice will recognize on the sale is A) $5,000. B) $2,000. C) $0. D) none of the above
B) requires the use of current-year tax rates only.
The computation of the gift tax liability for a current year A) is made without reference to previous years. B) requires the use of current-year tax rates only. C) requires the use of different rates, depending on when the gifts were made. D) requires knowledge of the total gift taxes paid in previous years.