Determine the items exempt from gift tax that were paid by Yancey: 1. College ex

Question

Determine the items exempt from gift tax that were paid by Yancey:

1. College expenses for his son paid directly to the institution

         1. Tuition = $20,000

           2. Room and Board = $10,000

2. Transfer to Throw Them All Out political party = $3,000

3. College expenses for his daughter paid directly to her

          1. Tuition = $35,000

          2. Room and Board = $10,000

4. Medical expenses for his son = $20,000

5. Medical expenses for his son’s friend Sergio = $5,000

Requirements: Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that your thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions is permitted. Submit a single MS Excel file for grading.

Explanation / Answer

1.

1.1 - Tution fee paid by parent directly to the institution is exempt from gift tax

1.2 - Room and Board expenses paid by parent directly to the institution in exempted

2. Gifts to a political organization for its use is exempted from gift tax

3

3.1 Tution fee paid directly to daughter is taxable

3.2 Room and board expenses paid directly to doughter is taxable

4. if medical expenses paid by parent directly to medical institution is exempt. if the parent paid to his son and he spend for expenses will be taxable.

5. Medical expenses for son's friend is taxable.

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