Skip to Main Content
GiftLaw Pro
Charitable Giving & Tax Information Service
Back to Gift Planning Website
GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.3 Gift Annuity  >  3.3.9 Income, Gift and Estate Taxes  >  Basic Quiz

Basic Quiz - 3.3.9 Income, Gift and Estate Taxes

1. When a gift annuity is created for another person, there is a gift tax consequence.
           
2. If a donor creates a gift annuity for him or herself and another person and does not retain a power of revocation, there is no gift tax.
           
3. With a deferred gift annuity funded for another person, the donor can use his or her annual exclusion to offset some or all of the gift tax.
           
4. In order to use the annual exclusion for a gift, the gift must be complete and also must be a present interest.
           
5. For a husband and wife two-life gift annuity, where no power of revocation was reserved, there is no estate tax in either estate due to the gift annuity amount.
           
6. Whenever a donor retains a power of revocation for a gift annuity, part of the annuity will be included in the donor's estate if the donor passes away and the gift annuity is still in existence.
           
7. When a donor funds a gift annuity for him or herself and another person with separate property, it is typically recommended that the donor retain a right of revocation.
           
8. When calculating the income stream of the gift annuity to be included in the donor's estate, it is permissible to use the current Applicable Federal Rate or the two preceding Applicable Federal Rates.
           
9. If a gift tax is payable, the donor can use his or her income tax deduction to offset the gift tax.
           
10. When a donor funds a gift annuity for another person, the amount subject to gift tax is the present value of the annuity.