In 2015, Homer and his wife, Wilma (residents of a non– community property state) make the gifts listed below. Homer’s previous taxable gifts consist of $100,000 made in 1975 and $1.4 million made in 1996. Wilma has made no previous taxable gifts.
Wilma’s current year gifts were
To Art ……………………………………… $400,000
To Bart ……………………………………… 6,000
Homer’s current year gifts were
To Linda ……………………………………$600,000
To a charitable organization ……………….. 100,000
To Norma (future interest) . ……………… 200,000
a. What are the gift tax liabilities of Homer and Wilma for 2015 if they elect gift splitting and everyone except Norma receives a present interest?
b. How would the gift tax liabilities for each spouse in Part a change if they do not elect gift splitting?