[jdiiorio]

Hi All,

I was looking the R4: Gift tax simulation in particular tab 2. Based on the instructions which read:

Phyllis Speedo, who has already used up her lifetime exclusion, made the following gifts during the year

• Then there’s a lot of data (exactly 7 different gifts this person made)

Considering Phyllis Speedo situation, calculate the total taxable amount of the gifts she made during the current year…

When I worked the problem I understood that a person can only deduct up to $13,000 for a year. However, in the solution they subtract $13,000 from each gift that was not entirely exempt (such as direct payments to a hospital or college). I’m so confused. How can this person deduct $13,000 from every separate gift? Am I reading the question wrong?

ILLINOIS CANDIDATE
FAR - Passed
BEC - Passed
AUD - Passed

[Minimorty]

A person can exclude $13,000 for each recipient. So if I have 10 grandchildren, I can give $13,000 to each for a total of $130,000 and not pay any tax. You just have to remember that the $13,000 exclusion is PER RECIPIENT.

[jdiiorio]

OMG what a silly mistake =( Thanks! jajaja

ILLINOIS CANDIDATE
FAR - Passed
BEC - Passed
AUD - Passed

[NYC_CPA]

also don't forget that DIRECT PAYMENTS TO COLLEGE OR HOSPITAL is FULLY EXEMPT. So If I pay $50,000 for my son's college tuition DIRECT TO THE COLLEGE, then ALL $50,000 is excluded from gift tax.

"I hate every minute of training, but I said, DON'T QUIT. Suffer now and live the rest of your life as a champion" - Muhammed Ali
FAR: 65(11/10), 80(02/11->Yaeger Audio!)
AUD: 73(05/15/11 Yaeger Homestudy), retake 76(08/31/11)
BEC: 73(08/05/11) Yaeger Homestudy, 71(11/30/11), retake 80(04/20/12)
REG: 80 (11/15/11) Yaeger Homestudy

[Author]

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