Question

Brian and Amy are husband and wife and elect to split every gift they make. Disregarding the $11,200,000 protected by the unified transfer tax credit, which of the following year 2018 gifts is at least partially taxable to Brian and/or Amy under the gift tax rules? (NOTE: The annual exclusion amount for 2018 is $14,000.)

Answer 1

Any gift made by Brian or Amy in 2018 that exceeds the annual exclusion amount of $14,000 will be partially taxable under the gift tax rules.

Step-by-step explanation:

In the year 2018, any gift made by Brian or Amy that exceeds the annual exclusion amount of $14,000 will be at least partially taxable under the gift tax rules. The annual exclusion amount is the maximum amount of money or property that an individual can gift to another individual without incurring a gift tax.

For example, if Brian gives a gift of $20,000 to someone in 2018, the amount exceeding the annual exclusion amount ($20,000 - $14,000 = $6,000) will be considered taxable. However, if Brian and Amy decide to split the gift, each of them can gift up to $14,000 to the same person without incurring any gift tax.