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Taxable Gifts: Sample Problems/Calculations

Jordan, a single woman, is very generous. She enjoys giving gifts to others and has given taxable gifts of $5,000,000 in prior years. This year she gave the following gifts:

1. To Judy she gave $32,000 in cash to pay Judy's medical bills
2. To Mark she gave a new car valued at $48,000
3. To Kristen she gave a $7,000 painting
4. To Louisiana State University she gave $19,000 to pay for Haley's tuition for the year

Calculate Jordan's total taxable gifts for the current year.
A. $37,000
B. $52,000
C. $55,000
D. $87,000
E. $106,000

Calculate Jordan's gift tax liability due for the current year.
A. $0
B. $15,170
C. $18,900
D. $22,140
E. $22,960

Eric died on July 24. At the time of his death, he owned 1,000 shares of Jefferson Crab stock. Given the trade prices for Jefferson Crab surrounding Eric's date of death, at what value will the Jefferson Crab be included in Eric's gross estate?
Thursday, July 15: $101 stock price
Monday, July 19: $104 stock price
Tuesday, July 27: $103 stock price
Wednesday, July 28: $108 stock price
A. $103,290
B. $103,440
C. $103,500
D. $104,000

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Solution Preview

1. Total gifts $106,000
(-) Annual exclusions $33,000
(-) Qualified transfers $19,000
Total taxable gifts ...

Solution Summary

Solution to problems based on gift tax and gross estate