Question

1. Cameron gave the following gifts to her niece, Jill and nephew, Jack:

• $10,000 to Jill and $10,000 to Jack in 2016

• $15,000 to Jill and $20,000 to Jack in 2017

• $25,000 to Jill and $25,000 to Jack in 2018

The annual exclusion for 2016 & 2017 is $14,000 and for 2018 is $15,000; the lifetime estate and gift tax basic exclusion amount is 2016 in $5,450,000; 2017 in $5,490,000, and 2018 in 11,180,000. Calculate the value of the gift tax using the table below.

GIFT TAX CALCULATION
1. Total Current Year Gifts
2. Less Annual Exclusion
3. Total Current Year Taxable Gifts
4. Plus Taxable Gifts from Prior Years
5. Total Taxable Gifts
6. Tax on Total Taxable Gifts
7. Tax on Prior Gifts
8. Balance
9. Applicable Credit
10. Applicable Credit Against Tax for all Prior Periods
11. Balance (subtract 10 from 9)
12. Applicable Credit (smaller of 8 or 11)
13. Total Gift tax (8 minus 12)

Answer 1