Question

All of the following statements about the gift tax annual exclusion are correct EXCEPT?

1) A separate annual exclusion is available for each donee.
2) The annual exclusion is currently (2019) set at $15,000.
3) Gift tax is always due on the excess over the annual exclusion.
4) The annual exclusion is the amount that an individual may give to other individuals each year without incurring a gift tax.

Answer 1

The correct statement regarding the 3) gift tax annual exclusion is that gift tax is always due on the excess over the annual exclusion.

Step-by-step explanation:

The correct statement regarding the gift tax annual exclusion is that gift tax is always due on the excess over the annual exclusion. The gift tax annual exclusion is the maximum amount of money that an individual can give to another individual each year without incurring a gift tax.

The annual exclusion is currently set at $15,000 for the year 2019. A separate annual exclusion is available for each donee, meaning that an individual can give up to $15,000 to multiple individuals without incurring a gift tax.