Question

In 2019, Joshua gave $13,400 worth of Microsoft stock to his son. In 2020, the Microsoft shares were worth $27,000.

What was the gift tax in 2019? The gift tax exemption in 2019 was the same as in 2020.

Answer 1

Providing the annual gift tax exclusion was same in 2019 and 2020 and was $15,000, Joshua's gift of $13,400 worth of Microsoft stock to his son would not be subject to gift tax as it was below the exclusion limit.

Step-by-step explanation:

The question is seeking to determine the amount of gift tax that may have been due when Joshua gave Microsoft stock to his son in 2019. However, to calculate the exact gift tax, we would need the annual gift tax exclusion for 2019. Since it's indicated that the gift tax exemption was the same in 2019 and 2020, and if we assume the standard gift tax exclusion for an individual in 2020 which was $15,000, then no gift tax would have been due. This is because the value of the stock ($13,400) was below the annual exclusion limit. Therefore, Joshua's gift would not surpass the exemption limit and there would be no gift tax incurred.