What amount of gift tax applicable credit remains available to Norma in 2021?
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Norma, a widow, has made lifetime gifts to her two grandchildren in an effort to reduce the size of her gross estate. In 2012, Norma made a $100,000 taxable gift. She made another $150,000 taxable gift in 2014. She used her gift tax applicable credit amount to offset any gift tax liability for all gifts.
What amount of gift tax applicable credit remains available to Norma in 2021?
The gift tax is a tax on gifts that must be paid by the taxpayer who gives significant money or valuable assets to another person without expecting anything in return. Depending on the type of gifts and their monetary value, the tax rate can be anywhere between 18% to 40%. This tax is imposed to stop taxpayers from transferring valuables and cash to others just to reduce their tax obligations.
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- Shezan made a gross chargeable lifetime transfer of £305,000 in January 2014. He also transferred £1,900 to his friend Stevenson in January 2018. In August 2018, he makes a transfer of £390,000 to a trust for the benefit of his grandchildren. The trustees (donee) pay the tax arising from the gift. How much lifetime inheritance tax will be payable in respect of his gift of £390,000? Shezan has not paid any tax on the gift made in January 2018 since it was covered by the annual exemption for the tax year 2017/18.Bret died and was survived by his wife, Anne, and two adult children. Bret's will provided for the maximum estate tax applicable exclusion amount for the year of death to be placed into a family bypass trust, in which Anne and the children were named as income beneficiaries, with the children to receive equal shares of the trust assets upon Anne's death. The will provided that the remainder of Bret's estate was to be placed in a power of appointment trust. Bret did not make any lifetime taxable gifts. Assume that no federal estate tax deductions other than the marital deduction were taken. Which of the following are CORRECT statements about the federal estate tax implications of the estate planning techniques contained in Bret's will? Bret's taxable estate will be zero, but his tax base will be the maximum estate tax applicable exclusion amount. Anne's interest in the family bypass trust is considered to be a terminable interest; thus, assets placed in this trust will not be entitled…Munabhai
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