(a) To determine: Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car. Introduction: Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged. Gift is a present willingly given to someone without receiving any monetary return or consideration against it. Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Question

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Answer 1

Question

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

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Answer 2

Question

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

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Answer 3

Question

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

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Answer 4

Question

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

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Answer 5

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

Answer 6

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Answer 7

Chapter 16, Problem 4PA

Summary Introduction

(a)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case $24,000 is received as gift from grandparents for the purchase of new car.

Introduction:

Taxable value is the value of an estate of a person after eligible deductions upon which the tax is charged.

Gift is a present willingly given to someone without receiving any monetary return or consideration against it.

Estate is the sum total of all the money, assets and properties held by a person expressed in monetary terms.

Answer 8

Expert Solution

Explanation of Solution

Given,

Value of gift is $24,000.

A sum of $24,000 is gifted to grandchild by his grandparents for the purchase of a new car and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $10,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $10,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $10,000 and value of inclusion is an estate will be $10,000.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

Thus, the total value of gift which is taxable under gift tax is $10,000 and the value of inclusion is an estate is $10,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,900,000 of an individual.

Answer 13

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Answer 14

Summary Introduction

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Answer 15

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of gift under gift tax is $21,000 because it is above the specified exemption limit.
The value of inclusion in an estate is $21,000because it is above the specified exemption limit.

Hence, the taxable gift amount will be $21,000 and value of inclusion is an estate will be $21,000.

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Conclusion

Thus, the total value of gift which is taxable under gift tax is $21,000 and the value of inclusion is an estate is $21,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,790,000 of an individual.

Answer 20

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Answer 21

Summary Introduction

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Answer 22

Expert Solution

Explanation of Solution

Given,

Value of gift is $35,000.

A sum of $35,000 is gifted to daughter for payment tuition fees of W College and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for education is exempt from gift tax.

Since, expenses made for education is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because educational expenses are not subject for payment of gift tax.

Answer 27

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Answer 28

Summary Introduction

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Answer 29

Expert Solution

Explanation of Solution

Given,

Value of gift is $47,000.

A sum of $47,000 is gifted to brother by his sister for payment of medical expenses and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for medical treatment is exempt from gift tax.

Since, expenses made for medical treatment is not eligible for tax so, the taxable gift amount will be $0 and value of inclusion in an estate will be $0.

Answer 30

Expert Solution

Answer 31

Expert Solution

Answer 32

Expert Solution

Answer 33

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the value of inclusion is an estate is $0 because medical treatment expenses are not subject for payment of gift tax.

Answer 34

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Answer 35

Summary Introduction

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Answer 36

Expert Solution

Explanation of Solution

Given,

Value of gift is $105,000.

A sum of $105,000 is gifted to charity by widowed women and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
Amount paid for charitable purposes is exempt from gift tax.

Since, all amount paid for charitable purposes is not eligible for tax so, the taxable gift amount will be $0 but the whole amount of $105,000 is eligible for deduction under estate value.

Answer 37

Expert Solution

Answer 38

Expert Solution

Answer 39

Expert Solution

Answer 40

Conclusion

Thus, the total value of gift which is taxable under gift tax is $0 and the whole amount of $105,000 is eligible for deduction under estate value because amount paid for charitable purposes is not subject for payment of gift tax.

Answer 41

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

Answer 42

Summary Introduction

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Answer 43

Expert Solution

Explanation of Solution

Given,

Value of gift is $50,000 worth of insurance policy and $10,000 of cash value.

A sum of $35,000 is gifted to son by his father for starting a new business and the taxable value of gift and the value of inclusion in an estate is,

Gifts are taxed under the federal gift tax by the giver of the gift and not by the recipient.
The lifetime exemption under gift tax given to an individual is $5,000,000.
The annual exemption under gift tax given to an individual is $14,000.
The taxable amount of insurance policy under gift tax is $50,000 because no deduction is allowed for insurance policy and amount of $10,000 is exempt because it is below the annual exemption of an individual.
The value of inclusion in an estate is $50,000because no deduction is allowed on insurance policy and for cash given will be $0 because it is below the specified limit.

Hence, the taxable gift amount for insurance policy will be $50,000 and value of inclusion is an estate will be $50,000 and for cash given the taxable amount is $0 and inclusion value is $0.

Answer 44

Expert Solution

Answer 45

Expert Solution

Answer 46

Expert Solution

Answer 47

Conclusion

Thus, the total value of gift which is taxable under gift tax is $50,000 and the value of inclusion is an estate is $50,000 but am immediate filing of tax is not required as it will be deducted from the lifetime exemption of gift tax and will reduce the lifetime exemption to $4,500,000 of an individual.

Answer 48

Ch. 16 - Prob. 1PA Ch. 16 - Prob. 2PA Ch. 16 - Prob. 3PA Ch. 16 - Prob. 4PA Ch. 16 - Prob. 5PA Ch. 16 - Prob. 6PA Ch. 16 - Prob. 1DC1 Ch. 16 - Prob. 2DC1 Ch. 16 - Prob. 3DC1 Ch. 16 - Prob. 4DC1

Explanation of Solution

(b) To determine: Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

Explanation of Solution

(c) To determine: Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

Explanation of Solution

(d) To determine: Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

Explanation of Solution

(e) To determine: Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

Explanation of Solution

(f) To determine: Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.

Explanation of Solution

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Chapter 16 Solutions

(b)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case son received $35,000 from his father to start a business

(c)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case parents paid $35,000 for tuition fees of W college for their daughter’s education.

(d)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case sister paid $47,000 as medical expenses of her brother at D medical centre.

(e)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case a widow paid $105,000 to charity.

(f)

To determine:

Taxable value of gifts and their value of inclusion in an estate in case mother gave an insurance policy to her daughter of face value $50,000 and a cash value of $10,000.