1.        With respect to the sale of an asset, the taxable gain is the difference between the amount received and the asset's tax basis. Therefore, the lower the basis the lower the tax liability. (True/False).

2.        Generally, the basis of an inherited asset is the fair market value at the date of the owner's death. (True/False).

3.        With respect to a gift of an appreciated asset, the donor's basis carries over to the donee. (True/False).

4.        The following variables should be analyzed in developing a tax basis plan:

 

I.  Determine the current tax base of each asset

II. Determine whether the assets are depreciable

III. Ascertain whether the assets are subject to secured indebtedness

IV. Ascertain the income tax brackets of the transferor and/or transferees

a.   I

b.   II, III, IV

c.    I, III, IV

d.   I, II, III, IV

Multiple Choice and True and False !!!!!!!!!!!