Question

a(n) _______ is a financial contract that provides annual payments until a specified year or until ones death.

○ annuity

○ savings account

○ trust

○ mortgage

question 27 2.27 pts

which is true about giving a gift?

○ the gift tax exclusion never changes.

○ all gifts are taxable as income to the person receiving it.

○ the estate and gift tax systems are completely separate and do not interact with each other.

○ you can give a set dollar amount to any person each year completely tax free

Explanation:

First Question (Top Question)

To solve this, we analyze each option:

• Annuity: An annuity is a financial contract that provides regular (often annual) payments, which can continue until a specified period or the annuitant's death.
• Savings account: A savings account is for depositing money to earn interest; it doesn't provide payments until death or a specified year in the described way.
• Trust: A trust is a legal arrangement for managing assets, not primarily for providing annual payments until death or a specified year.
• Mortgage: A mortgage is a loan for property, with payments to repay the loan, not structured as payments until death or a specified year in this context.

So the correct option is the one that matches the definition of an annuity.

We analyze each option:

• "The gift tax exclusion never changes": Gift tax exclusion amounts can change (e.g., due to inflation adjustments), so this is false.
• "All gifts are taxable as income to the person receiving it": Gifts are generally not taxable as income to the recipient (they may be subject to gift tax for the giver, not income tax for the receiver), so this is false.
• "The estate and gift tax systems are completely separate and do not interact with each other": The estate and gift tax systems are related (e.g., the lifetime gift tax exemption interacts with the estate tax exemption), so they are not completely separate.
• "You can give a set dollar amount to any person each year completely tax free": There is an annual gift tax exclusion (a set dollar amount, which can change but exists) that allows gifting a certain amount to any person each year without incurring gift tax. This matches the correct understanding of gift tax rules.

Answer:

A. annuity

Question 27