Jim gave Betsy, his daughter, $1,200,000 on 1/1/20XX, which she used as a cash contribution to become a member of BJS, LLC. Calculate the gift tax, if any that Jim would need to pay for the current tax year.

Alternatively, assume a note was signed by Betsy stating that the $1,200,000 given to her by her father would be returned to him in 5 years.

Calculate the gift tax, if any, in this case along with the interest element that Jim will have to include in his income for the current tax year.

Answer rating: 100% (QA)

To calculate the gift tax we need to consider the annual gift tax exclusion and the lifetime gift tax exemption provided by the Internal Revenue Servi... View the full answer