Question

Which of the following are completed gifts? Determine the value of each gift before any exclusions?

In March, Stephanie deposits $40,000 cash into a joint checking account for herself and her boyfriend, Michael, who deposits nothing into the account. In July, Michael withdraws $16,000 from the account.

Jennie pays $16,000 of her neighbor’s medical expenses directly to the hospital.

Jane pays her sister’s $20,000 tuition directly to the university.

Miriam transfers the title of investment land (valued at $85,000) to her son, Kevin.

Miguel deposits $180,000 into a revocable trust in February. In November, the trustee distributes $20,000 of income to the beneficiary, Juan.

Answer 1

1. The Withdrawal is Considered as a gift. And the Value of Gift is $16000

2. The Payments for Medical expense and tuition fees is not considered as Gift as per Section 2503(e). Thus Medical Expenses is not a gift

3. The Payments for Medical expense and tuition fees is not considered as Gift as per Section 2503(e). Thus Tuition Expenses is not a gift

4. Transfer of title is regarded as gift and Value of Gift is $85000

5. The Distribution from trustees is considered as Gift. The Value of Gift is $20000