Question

In 2017, Roger, who is single, gave an outright gift of $15,000 to a friend, Matt, who needed the money to pay tuition at an accredited university. In filing his 2017 gift tax return, Roger was entitled to a maximum exclusion of

a. $0.

b. $12,000.

c. $14,000.

d. $15,000.

Answer 1

Solution: Roger was entitled to a maximum exclusion of $14,000 which is annual exclusion limit for 2017. And he had to pay gift tax on rest amount of gift.

Roger was not eligible to exclude whole amount of the sum was paid for education expenses to someone. Because for qualifying this whole amount as exclusion for educational expense, he should had to pay this amount or sum directly to a qualifying educational orgnization or university but not to his friend who need it.