Question

Which of the following statements is correct concerning a gift?

a. A gift may be subject to "gift tax" which is paid by the person giving the gift.

b. A gift is included in the gross income of the person giving the gift and subject to income tax.

c. A gift is included in the gross income of the person receiving the gift and subject to income tax.

d. A gift may be subject to "gift tax" which is paid by the person receiving the gift.

Answer 1

The correct statement concerning a gift is that a gift may be subject to 'gift tax' which is paid by the person giving the gift.

Step-by-step explanation:

Among the given statements, the correct one concerning a gift is: a. A gift may be subject to 'gift tax' which is paid by the person giving the gift. Gift tax is a tax on donations of money or wealth from one person to another, and it is the responsibility of the person giving the gift to pay the tax. The purpose of this tax is to prevent wealthy individuals from avoiding taxes by giving away their wealth.