Question

6. Mark is married to Pam. Their daughter wants a car that costs $29,000. The money...

6. Mark is married to Pam. Their daughter wants a car that costs $29,000. The money will all come from Pam’s account. If the transfer is done properly it will not be subject to the gift tax.

      a) Explain briefly why there would be no gift tax

      b) Explain what steps are necessary to achieve the desired result

Homework Answers

Answer #1

Solution.>

Part a) For 2019 and 2020 tax years, one person can gift upto an amount of $15,000 absolutely tax free. For married couples, if they split the gift, they can gift twice the amount ie. $30,000. Since the gift amount was $29,000 in the question, they can gift it without paying any tax.

Part b)

- They have to fill seperate gift tax return as Spouses may not file a joint gift tax return.

- Copies of appraisals.

- Copies of relevant documents regarding the transfer.

- Documentation of any unusual items shown on the return.

- They both have to to fill form 709.

Note: Give it a thumbs up if it helps! Thanks in advance!

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