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Managing Taxes and Legal Documents: Mastery Test

Select the correct answer.

Tommy's grandparents recently gave him a check of $25,000 to support him through his years at college. Which tax might Tommy or his grandparents have to pay?

A. Tommy: gift tax; grandparents: none
B. Tommy: none; grandparents: inheritance tax
C. Tommy: inheritance tax; grandparents: none
D. Tommy: none; grandparents: gift tax

Sagot :

GinnyAnsweridn

Final answer:

Inheritance tax may need to be paid on assets transferred between generations, like in the scenario involving Tommy and his grandparents.


Explanation:

Inheritance tax is a tax that may apply when assets are passed on to beneficiaries after someone's death. In the scenario given, if Tommy's grandparents gave him $25,000, they might have to pay inheritance tax since it involves transferring wealth while alive. In this case, option OC would be the most likely answer.


Learn more about Inheritance tax here:

https://brainly.com/question/25582146


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