The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of woof–a-lot, inc. for an operating period. units unit cost total cost units sold beginning inventory 50 $124 $ 6,200 sale no. 1 40 purchase no. 1 30 100 3,000 sale no. 2 32 purchase no. 2 40 88 3,520 __ totals 120 $12,720 72

Which of the following is true concerning the 5/5 lapse rule? a) the 5/5 lapse rule deems that a taxable gift has been made where a power to withdraw in excess of $5,000 or five percent of the trust assets is lapsed by the powerholder. b) the 5/5 lapse rule only comes into play with a single beneficiary trust. c) amounts that lapse under the 5/5 lapse rule qualify for the annual exclusion. d) gifts over the 5/5 lapse rule do not have to be disclosed on a gift tax return.