Compute the gift tax payable for both Jack and Elma. Jack and Elma are married to each
Question:
Compute the gift tax payable for both Jack and Elma. Jack and Elma are married to each other throughout 2021. In 2021, they decided to gift split. In 2021,
Elma gives out the following gifts:
Transfers stocks to a trust with all of the income payable to her friend Thelma for the next 32 years and then remainder payable to Jeremy, Thelma’s Husband. Thelma is 36 years old and the interest rate to use is 5%. The stock is valued at $1,550,000.
In 2021, Jack gives out the following gifts:
• $125,000 in cash to Andrea
• $125,000 in cash to Jack
• $120,000 in Jewelry to Bianca
• $540,000 of Land to Allen
• $1,700,000 of stock to a Charitable organization.
Prior gifts that Jack gave were in 1987 and 2004.
• In 1987, Jack gave his friend Calvin stocks with FMV of $1,000,000. (Yearly exclusion amount in 1990 was $15,000)
• Jack’s taxable gift in 1987 was $1,491,000.
• In 2004, Jack gifted a cruise that was valued at $2,800,000 to his other friend Palmer. (Yearly exclusion amount in 2004 was 12,000).
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill