Question

barry and mary have accumulated over $4.3 million during their 50 years of marriage. they have five children and seven grandchildren. how much money can barry and mary gift to their grandchildren in 2020 without any gift tax liability? (enter your answer in dollars not in millions of dollars.)

Answer 1

Barry and Mary can gift up to $210,000 to their seven grandchildren in 2020 without any gift tax liability, as they can each gift $15,000 per grandchild without triggering taxes.

Step-by-step explanation:

The subject question is regarding how much money Barry and Mary can gift to their grandchildren in 2020 without incurring any gift tax liability. In the United States for the year 2020, the annual gift tax exclusion amount is $15,000 per recipient. This means that an individual can give up to $15,000 to as many individuals as they choose without any tax implications. Barry and Mary have seven grandchildren, and since both grandparents can gift separately, each grandchild can receive $15,000 from Barry and $15,000 from Mary, totaling $30,000 per grandchild without gift tax liability.

This would mean that Barry and Mary could collectively gift up to $210,000 in 2020 to their grandchildren without triggering any tax ($30,000 x 7 grandchildren). It's important to note that if Barry and Mary decide to gift more than this amount to a single grandchild, they would have to report the excess over $15,000 per donor per year to the IRS and it would count towards their lifetime gift and estate tax exemption.