[OnToTheNextOne]

For question Question #: 1563 Category: 4G2 Annual Exclusion and Gift Tax Deductions

A husband and wife agree to split monetary gifts to their relatives. The husband gives his daughter $20,500, and the wife gives her niece $17,000. The annual exclusion is $14,000. What amount is the taxable gift for the husband and wife?

The correct answer is $0, it states that Married taxpayers are allowed to split gifts which will maximize the annual gift exclusion for each gift recipient. In this example, the first gift of $20,500 will be considered a gift of $10,250 by each spouse. The gift will then fall under the annual exclusion specified of $14,000. The second gift of $17,000 will be considered a gift of $8,500 by each spouse.

Is this question implying that EACH gift is subject to a $14,000 exclusion per taxpayer?

[monikernc]

i believe each recipient is subject to the exclusion and the spouses can each give the same recipient a gift up to the exclusion amount.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
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[mcohen1993]

Each person can gift another person or entity up to 14K a year tax free. If it is a married couple, that is essentially 28K for the couple as long as they agree to split gifts.

The life time exclusion is a bit more difficult but just remember the number changes every year and if a spouse dies it goes into the estate return and the surviving spouse can use it for their gifts or estate.

REG: 91!!
BEC: 80!!
AUD: TBA
FAR: TBA

In the order I plan to take the exams.

[Tripin93]

Mcohen1993 is correct. Every year, you can gift anyone up to $14,000. Anything over $14,000, the GIVER owes a tax. The receiver never owes a tax.

If I were billionaire, I could gift as many people as I wanted $14,000 (tax free.) If I gave people $14,001, then I would owe taxes.

Motivated by JC. I do it to make God proud.

FAR: 91 July 2015
AUD: 83 October 2015
REG: 81 January 2016
BEC: 83 February 2016

[Tripin93]

Mcohen1993 is correct. Every year, you can gift anyone up to $14,000. Anything over $14,000, the GIVER owes a tax. The receiver never owes a tax.

If I were billionaire, I could gift as many people as I wanted $14,000 (tax free.) If I gave people $14,001, then I would owe taxes.

Motivated by JC. I do it to make God proud.

FAR: 91 July 2015
AUD: 83 October 2015
REG: 81 January 2016
BEC: 83 February 2016

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