Brenda Chatterjee is wealthy, single, and generous. During the previous year she made the following gifts:

•Gift of stock to the local art museum (a 501(c)(3) nonprofit organization): $245,000

•College tuition payment for niece: $29,000 made directly to the institution

•Medical bills for elderly neighbor: $18,000 paid directly to the hospital

•Home down payment gift to daughter: $30,000 paid directly to the mortgage lender

•Cash gift to son: $17,000

•Use the gift tax rates shown below as a guide to answer the following questions:

a. What is the total amount of taxable gifts in 2018?

b. What is Brenda’s gift tax liability in 2018?

c. Assuming a unified credit of $4,425,800, what alternative does Brenda have in terms of paying the gift tax liability?

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Plus, You'll Pay This Percentage on the Amount in Excess of For Taxable Estates You'll Pay This Amount of Tax ... Between ... And . the Lower Limit $0 $9,999 $0 18% $10,000 $19,999 $1,800 20% $20,000 $39,999 $3,800 22% $40,000 $59,999 $8,200 24% $60,000 $79,999 $13,000 26% $80,000 $99,999 $18,200 28% $100,000 $149,999 $23,800 30% $150,000 $249,999 $38,800 32% $250,000 $499,999 $70,800 34% $500,000 $749,999 $155,800 37% $750,000 $999,999 $248,300 39% $1,000,000 $345,800 40% Plus, You'll Pay This Percentage on the Amount in Excess of For Taxable Estates You'll Pay This Amount of Tax ... Between ... And . the Lower Limit $0 $9,999 $0 18% $10,000 $19,999 $1,800 20% $20,000 $39,999 $3,800 22% $40,000 $59,999 $8,200 24% $60,000 $79,999 $13,000 26% $80,000 $99,999 $18,200 28% $100,000 $149,999 $23,800 30% $150,000 $249,999 $38,800 32% $250,000 $499,999 $70,800 34% $500,000 $749,999 $155,800 37% $750,000 $999,999 $248,300 39% $1,000,000 $345,800 40%

Answer rating: 100% (QA)

a From the above table we can see that upto 9999 gifts are not taxable In the question given all ind... View the full answer