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Digiron [165]
3 years ago
13

Mr. Bailey would like to gift $515,000 (FMV) of appreciated property (basis $200,000) to his son. Mr. Bailey doesn't want to use

his liquid assets to pay the gift tax (40%). He already has gifted $11,400,000. What would you suggest?
Business
1 answer:
Oliga [24]3 years ago
7 0

Answer:

He should set a grantor retained annuity trust (GRAT).

Explanation:

Mr. Bailey would be the grantor that transfers the asset into the GRAT, but retains the right to receive annuity payments for a number of years. The IRS has set a minimum annuity corresponding to the Section 7520 rate, during the last two years the rate has varied from 2-3%. When the trust expires (pays all the annuities), the beneficiary gets the asset tax free.

Since the grantor is giving up an asset but in exchange is receiving an annuity form it, there is no applicable gift tax, it is called a zeroed-out GRAT.

This type of grant makes sense only if the grantor believes that the future value of the asset will be higher than the current value, since the annuity is based on the current value. In this case, Mr. Bailey would receive payments based on a $200,000 value, but the property's fair market value is already higher and should increase as time passes.

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Suppose that, instead of developing its Datsun line for emerging markets, Nissan simply sold its existing models in those market
mylen [45]

Answer:

Explanation:

(A) First Degree Price Discrimination

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Also, this is a deliberate action or business strategy taken by the Nissan automobile company so it is price discrimination.

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So since the first aim of a company is to make profit, instead of losing buyers of the old model completely, Nissan will sell the off at much lower prices.

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8 0
3 years ago
The percentage of sales approach separates accounts on the pro forma income statement and balance sheet into those that change d
lukranit [14]

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5 0
4 years ago
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Mars2501 [29]

Answer:

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The "access management" component deals with the management and control of the ways entities are granted access to resources.

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6 0
3 years ago
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6 0
3 years ago
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