In Year 1, a married couple (US citizens) gives ,000 cash to their son. They elect gift splitting. The annual exclusion is ,000 per donee. What is the taxable gift amount for the couple combined?

Answer options:

,000

How to approach this question

1. Split the gift (50/50). 2. Subtract Annual Exclusion (,000) from EACH half. 3. Sum the remainders.

Full Answer

C.,000✓ Correct

With gift splitting, the ,000 gift is treated as ,000 from each spouse. Each spouse deducts the ,000 annual exclusion. ,000 - ,000 = ,000 taxable gift each. Total ,000.

Common mistakes

Applying only one exclusion to the total amount.

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