Question

1. Elijah and Anastasia are husband and wife who have one married children and twelve minor grandchildren.

For 2018, what is the maximum amount they can give to their family (including the sons- and daughters-in-law) without using any of their unified transfer tax credit?

2. Isabella files her income tax return 90 days after the due date of the return without obtaining an extension from the IRS. Along with the return, she remits a check for $146,000, which is the balance of the tax she owes.

Note: Assume 30 days in a month.

Disregarding the interest element, enter Isabella's penalty amount for each, failure to file and failure to pay.

Failure to pay	$
Failure to file	$

Answer 1

Answer 1: In total there are 14 donees ( 1 married children + 1 Spouse + 12 grandchildren) * $15000( annual exclusion for 2018 ) * 2 donors( Elijah and Anastasia) = $420,000 is the answer

Answer 2: 90 Days will fall in 3 month bracket.

Failure to pay penalty [0.5% * Amount Delayed * no of months ] = $2190

Failure to File penalty [ 5% * Amount * No of months] = $ 21,900

Failure to pay penalty will be waived off for the months in which late filling and late payment is done.

So failure to pay penalty amount of $2190 will be waived off from late filling penalty

Total penalty would be $21900