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I was doing a simulation I thought I had it right but the correct answer given is not what I got. The sim is below:
Thomas, a US citizen, made the following gifts in 2011:
* Stock valued at $29,000 (basis to Thomas was $15,000) to his sister.
* $20,000 in tuition directly to his grandchild’s university on the grandchild’s behalf.
* $50,000 directly to his mother to help with her medical expenses.
* $10,000 to the National Republican Party.
* $50,000 to a trust. Randy will receive income from the trust for life and then the property will be transferred to his grandson.
Thomas has made no other lifetime transfers. He has been married to his wife, Tracy, for 10 years.
For items 1 through 5 below, enter the answer in the corresponding shaded cell.
1. How much of the stock gift to Thomas’s sister is considered a taxable gift in 2011?(Answer:$16,000)
2. How much of the $20,000 tuition payment paid to the university is considered a taxable gift?(Answer:$0)
3. How much of the $50,000 gift made to Thomas’s mother is considered a taxable gift?(Answer:$37,000)
4.How much of the $10,000 gift to the National Republican Party is considered a taxable gift?(Answer:$0)
5.How much annual exclusion can be used to offset the gift of the trust property to his grandson? (Answer:$0)
6. Assuming that Thomas and Tracy elect gift-splitting on their 2011 gift tax return, how much of the cash gift to Thomas’s sister is considered a taxable gift in 2011? (Answer:$3,000)
7. Ignoring exceptions for weekends and holidays, when is the due date for Thomas and Tracy’s 2011 gift tax return (mm/dd/yy)? (Answer: 4/15/12)
****Ok so I understand how they got the answer, however I would of thought the answers would of been different due to a $26,000 exemption (Him being married?)
My answers:
1) $3,000
3) $24,000
Why wouldn’t that be the case in this example?
Thanks.
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