1. Mary made the following gifts: Gift Donee Value Cash Son $14,000 6-month cert
ID: 2446205 • Letter: 1
Question
1. Mary made the following gifts:
Gift Donee Value
Cash Son $14,000
6-month certificate of deposit Daughter 6,000
Antique furniture Sister 24,000
Stocks in trust: Life estate Brother 78,000
Remainder Daughter 22,000
Mary's taxable gifts total:
A. $128,000
B. $114,000
C. $ 96,000
D. $ 86,000
2. Nancy, who is single, made the following gifts:
Paid $12,000 in medical bills for her friend. The payment were paid directly to her friend's doctor.
$15,000 to her mother to help her with rent and groceries.
$20,000 to her nephew, Tom, to get him started in business.
Nancy also has made a $50,000 interest-free demand loan to her nephew, James. The loan is still outstanding. The applicable federal interest rate remained constant at 5%.
What is the amount of Nancy's taxable gifts?
A. $39,000
B. $ 7,000
C. $12,000
D. $10,000
3. Mr. C, a U.S. citizen, made the following gifts:
$15,000 cash to his son; $50,000 to his wife, also a U.S. citizen.
Equipment to his brother (fair market value $12,000; adjusted basis $8,000).
$100,000 cash to City W for construction of a new city park.
Without considering gift-splitting, what is the total of Mr. C's exclusions and deductions for his gift tax return?
A. $160,000
B. $168,000
C. $174,000
D. $177,000
E. $176,000
4. Blum who is single, gave an outright gift of $50,000 to a friend, Gould, who needed the money to pay medical expenses. In filing the gift tax return, Blum was entitled to a maximum exclusion of:
A. $50,000
B. $22,000
C. $14,000
D. $ 0
5. Mr. C made the following gifts:
$12,000 to a university to pay tuition costs for his niece.
An undeveloped tract of land to his sister that had an adjusted basis to Mr. C of $4,000 and a fair market value of $25,000.
Various shares of stock to his wife that had an adjusted basis to Mr. C of $15,000 and a fair market value of $40,000.
Mr. C did not consent to gift-splitting. What is the total amount of taxable gifts?
A. $ 0
B. $27,000
C. $11,00.
D. $77,000
Explanation / Answer
THE FOLLOWING GIFTS ARE NOT TAXABLE
(1) CALCULATION OF TAXABLE GIFT OF MARY
Gift Donee Value Taxable amount
Cash Son $14,000 0
6-month certificate of deposit Daughter 6,000 6000
Antique furniture Sister 24,000 $24,000
Stocks in trust: Life estate Brother 78,000 $78,000
Remainder Daughter 22,000 $22,000
TOTAL $ 1,30,000
(2)CALCULATION OF TAXABLE GIFT OF NANCY
(3)CALCULATION OF TAXABLE GIFT OF MR C
(4)CALCULATION OF TAXABLE GIFT OF BLUM
SO BLUM WAS ENTITLED TO A MAXIMUM EXCLUSION OF $ 0
(5)CALCULATION OF TAXABLE GIFT OF MR C
GIFTS TAXABLE GIFT AMOUNT($) REASON $12,000 MEDICAL BILL DIRECTLY PAID TO FRIENDS DOCTOR 0- Tuition or medical expenses one pays directly to a medical or educational institution for someone are not taxable. Donor must pay the expense directly. If donor writes a check to donee and donee then pays the expense, the gift may be subject to tax.
- Gifts that are not more than the annual exclusion for the calendar year (For the year 2015: $14,000 per recipient for any one donor) are not taxable
- Gifts that are not more than the annual exclusion for the calendar year (For the year 2015: $14,000 per recipient for any one donor)are not taxable
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