Question

The gift tax is used to prevent people from avoiding the

a. excise tax.
c. income tax.
b. estate tax.
d. customs duty.

Answer 1

The gift tax is used to prevent people from avoiding the:
estate tax! (answer b)

The situation in which these taxes are employed is wealth inheritance: Gift tax is used when a person wants to pass down their wealth during their lifetime (which is sometimes down by the elderly to avoid this estate tax)