T1-M3 Gift Taxes

Question 1

what are unlimited exclusions?

Answer 1

• payments made directly to an educational institution
• payments made directly to a health care provider for medical care
• charitable gifts
• material deduction: transfers between spouses
• 2023 annual exclusion per person per year is $17K (34K for a married couple) and the gifts must be complete and a present interest

Question 2

what is general rule about recipient’s basis of the gift?

Answer 2

the basis of the gifts received is that the basis to the recipient equals the donor’s basis plus gift tax paid due to the appreciation in value inherent in the gift

Question 3

what are the future interest gifts that are not qualified for either deductions or exclusions?

Answer 3

• reversions (gifting assets and later getting the property back)
• remainders (distributed at some future time)
• trust income is distributed at some future time at the discretion of the trustee (not annually)
• present interests without ascertainable value

Question 4

what is tax deduction rule for contribution of LT property to charitable organizations?

Answer 4

• generally, the deduction amount is FMV at the time of contribution if the organization uses the property for the org’s purpose.
• however, the deduction is limited to the donor’s adjusted basis if the organization sells the property or does not use it for the org’s purpose