Question

For the holidays, Marty gave a watch worth $23,000 to Emily and jewelry worth $58,750 to Natalie. (Leave no answer blank. Enter zero if applicable.)

a. Has Marty made any taxable gifts this year and, if so, in what amounts?

	Marty's taxable gift to Emily Marty's taxable gift to Natalie

b. Assume Marty is married to Wendy and they live in a community property state. What are the amounts, if any, of their taxable gifts?

	Marty's taxable gift to Emily Marty's taxable gift to Natalie Wendy's taxable gift to Emily Wendy's taxable gift to Natalie

Answer 1

1. Has Marty made any taxable gifts this year and, if so, in what amounts?

Annual gift exclusion for the year 2018 is $15000 where it was $14000 in 2017

Now answer is solved as per taking exclusion amount of $15000.

Marty's taxable gift to Emily [$23000-$15000]	$8,000
Marty's taxable gift to Natalie [$58750-$15000]	$43,750

1. Assume Marty is married to Wendy and they live in a community property state. What are the amounts, if any, of their taxable gifts?

Marty's taxable gift to Emily	$0
Marty's taxable gift to Natalie	$7,188
Wendy's taxable gift to emily	0
Wendy's taxable gift to Natalie	$7,187

If the gifts are from community property, then both marty and his spouse made a gift of $11500 and $29375. if the annual exclusion is reduced, neither marty nor his spouse wendy has made a taxable gift to Emily but each of them has contributed $7187.5 to Natalie.