American College Exam HS330 Topic 1 Question 87 Discussion

Actual exam question for American College's HS330 exam

Question #: 87
Topic #: 1

A single man with substantial assets and income is supporting his 80-year-old partially senile mother with monthly cash gifts. He is trying to find a practical way to support his mother while at the same time saving federal gift and income taxes without giving up ultimate control of any assets. Which of the following courses of action will best accomplish these objectives?

AMake her an interest free loan with a principal amount large enough to produce sufficient income for her support when invested in corporate bonds

BMake her annual gifts of enough interest income from the tax free municipal bonds in his portfolio so that she will be able to support herself

CMake her a gift of enough corporate bonds from his portfolio so that she will be able to support herself from the interest payments

DPurchase corporate bonds that pay interest in an amount sufficient for her to support herself and assign the interest payments to her

Show Suggested Answer

Suggested Answer: D

by Mozell at May 07, 2024, 03:31 AM

Limited Time Offer

25%

Off

Get Premium HS330 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Antonette

11 days ago

Option D seems like the best choice. By purchasing the corporate bonds and assigning the interest payments to his mother, he can maintain control over the assets while providing for her support.

upvoted 0 times

...