Begin by reviewing the tax return scenario below. Then, prepare 2021 gift tax returns (Form 709) for
Question:
Begin by reviewing the tax return scenario below. Then, prepare 2021 gift tax returns (Form 709) for both of the Johnsons to compute the total taxable gifts (line 3) for Frank and Nancy.
TAX RETURN SCENARIO
Frank R. and Nancy M. Johnson, ages 70 and 65, are retired physicians who live at 527 Montpelier Drive, Austin, Texas 78741. Their 3 adult children (Tony Johnson, Kurt Johnson, and Wendy Thompson) are mature and responsible people. The Johnsons have heard that some in Congress have proposed lowering the Federal gift tax exclusion to $5 million. Although this change likely will not occur, the Johnsons feel they should take advantage of the more generous exclusion available under existing law. Thus, the Johnsons make transfers of many of their high-value investments. These and other gifts made during 2021 are summarized below: