Question

Assume D, a widower, made no prior taxable gifts. Consider §§ 2501, 2502, 2505, and 6019.

In January of 2014, D makes a taxable gift in the amount of $1,500,000. What are the gift tax ramifications of the transfer? What is the amount of the gift tax payable? Must D file a gift tax return?

Answer 1

Answer:

The individual who makes the gift files the gift tax return, if fundamental, and pays any tax. In the event that somebody gives more than the annual gift tax exclusion sum or amount, the provider must file a gift tax return. That despite everything doesn't mean they owe gift tax. Gifts are possibly taxed when their worth exceeds the lifetime exclusion.

For the year 2014, lifetime exception was $53,40,000 and annual exclusion was $14,000 and rate of Tax was 40%.

Particulars	Amount	Amount
Taxable gift amount		$ 15,00,000
Less :Annual exclusion	$ 15,00,000 - $ 14000 = $ 14,86,000	$ 14,86,000
Less :Life time exemption	$ 14,86,000 - $ 53,40,000 = ($ 38,54,000)	($ 38,54,000)
Net taxable gift		$ 0
Gift tax payable		$ 0

• No,D doesn't file a tax return