SWFT Comprehensive Volume 2019
42nd Edition
ISBN: 9780357233306
Author: Maloney
Publisher: Cengage
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Question
In 2010 Casey made a taxable gift of $6.9 million to both Stephanie and Linda (a total of $13.8 million in taxable gifts).
Calculate the amount of gift tax due this year and Casey's unused exemption equivalent under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.)
Note: Enter your answers in dollars, not millions of dollars. Leave no answer blank. Enter zero if applicable.
a. This year Casey made a taxable gift of $1 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift he has ever made.
Gift tax due - $0
Unused applicable credit - ?
b. This year Casey made a taxable gift of $16.9 million to Stephanie. Casey is not married, and the 2010 gift was the only other taxable gift he has ever made.
Gift tax due - ?
Unused applicable credit - $0
c. This year Casey made a gift worth $16.9 million to Stephanie. Casey married Helen last year, and they live in a common-law state. The 2010 gift was the only other taxable gift Casey or Helen has ever made. Casey and Helen elect to gift-split this year.
Casey's gift tax due - $0
Casey's unused applicable credit - ?
Helen's gift tax due - $0
Helen's unused applicable credit - ?
Transcribed Image Text:EXHIBIT 25-1 Unified Transfer Tax Rates*
Tax Base Equal to or Over
Not Over
Tentative Tax
Plus
of Amount Over
$ 0
$10,000
$ 0
18%
$ 0
10,000
20,000
1,800
20
10,000
20,000
40,000
3,800
22
20,000
40,000
60,000
8,200
24
40,000
60,000
80,000
13,000
26
60,000
80,000
100,000
18,200
28
80,000
100,000
150,000
23,800
30
100,000
150,000
250,000
38,800
32
150,000
250,000
500,000
70,800
34
250,000
500,000
750,000
155,800
37
500,000
750,000
1,000,000
248,300
39
750,000
1,000,000
345,800
40
1,000,000
Transcribed Image Text:EXHIBIT 25-2 The Exemption Equivalent /Applicable Exclusion Amount
Year of Transfer
Gift Tax
Estate Tax
1986
$500,000
$500,000
1987 1997
600,000
600,000
1998
625,000
625,000
1999
650,000
650,000
2000 2001
675,000
675,000
2002 2003
1,000,000
1,000,000
2004 2005
1,000,000
1,500,000
2006 2008
1,000,000
2,000,000
2009 2010*
1,000,000
3,500,000
2011
5,000,000
5,000,000
2012
5,120,000
5,120,000
2013
5,250,000
5,250,000
2014
5,340,000
5,340,000
2015
5,430,000
5,430,000
2016
5,450,000
5,450,000
2017
5,490,000
5,490,000
2018
11,180,000
11,180,000
2019
11,400,000
11,400,000
2020
11,580,000
11,580,000
2021
11,700,000
11,700,000
2022
12,060,000
12,060,000
2023
12,920,000
12,920,000
2024
13,610,000
13,610,000
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