Using property she inherited, Myrna makes a 2018 gift of $16.2 million to her adult daughter, Doris. Neither Myrna nor her husband, Greg has made any prior taxable gifts. Determine the gift tax liability if:
a. The election to split gift is not made.
b. The election to split gifts is made.
c. What are the tax savings from making the election?
| a. The election to split gift is not made. | ||
| Myrna's gift tax is computed as follow | ||
| Amount of gift | $16,200,000 | |
| Less annual Exclusion | -$15000 | |
| Taxable gift | $16,185,000 | |
| Gift tax on $16,185,000 per appendix A- | ||
| Using table for Computing Gift Tax ($345,800 + 40%x ($16,185,000 - $1,000,000) | $6,419,800 | |
| Less Maximum credit allowed for 2018 | -$4,417,800.00 | |
| Gift tax due on 2018 gift | $2,002,000 | |
| b) | ||
| If the § 2513 election is made | ||
| Myrna | Greg | |
| Amount of gift | $8100000 | $8100000 |
| Less annual Exclusion | -$15000 | -$15000 |
| Taxable gift | $8085000 | $8085000 |
| Using table for Computing Gift Tax ($345,800 + 40%x ($80,185,000 - $1,000,000) | $3,179,800 | $3,179,800 |
| Less Maximum credit allowed for 2018 | -$4,417,800 | -$4,417,800 |
| Gift tax due on 2015 gift | $0 | $0 |
| c) | ||
| Myrna By making the § 2513 election to split, doris saves | $2002000 | |
Using property she inherited, Myrna makes a 2018 gift of $16.2 million to her adult daughter, Doris. Neither Myrna nor her husband, Greg has made any prior taxable gifts. Determine the gift tax liabil...
Using Property, she inherited, Myrna makes a cash gift of $16.2 million to her adult daughter in 2020. Neither Myrna nor her husband, Greg, has made any prior taxable gifts. They do not live in a community property state. Determine the Federal gift tax liability if: 1. The election to split gifts is not made (5 points) 2. The election to split gifts is made. (5 points) 3. What are the tax savings from making the election? (5 points)