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She placed a $30,000 bank account in joint tenancy with her daughter. Neither she nor her daughter made any withdrawals in 2017.She placed a $20,000 bank account in joint tenancy with her daughter. During 2017, Sadie withdrew $2,000, and her daughter withdrew $5,000 from the account. She bought $10,000 in U.S. savings bonds registered as payable to herself or her daughter. Neither she nor her daughter cashed any of the bonds during 2017. What is the gross amount of gifts given by Sadie in 2017?$80,000This answer is correct.If a donor buys property with his or her own funds and the title to such property is held by the donor and the donee as joint tenants with right of survivorship and if either the donor or the donee may give up those rights by severing his or her interest, the donor has made a gift to the donee in the amount of half the value of the property. If the donor creates a joint bank account for himself or herself and the donee (or a similar kind of ownership by which (s)he can get back the entire fund without the donee’s consent), the donor has made a gift to the donee when the donee draws on the account for his or her own benefit. The amount of the gift is the amount that the donee took out without any obligation to repay the donor. If the donor buys a U.S. savings bond registered as payable to himself, herself or the donee, there is a gift to the donee when (s)he cashes the bond without any obligation to account to the donor. Therefore, Sadie’s gross amount of gifts given is $80,000 ($75,000 + $5,000).Which of the following questions would be relevant in determining whether a tuition payment made on behalf of another individual is excludible for gift tax purposes? I.Was the tuition payment made for a part-time student? II.Was the qualifying educational organization located in a foreign country? III.Was the tuition payment made directly to the educational organization?
IV.Was the tuition payment made for a family member?III only.This answer is correct.Whether the tuition payment was made directly to the educational organization is a relevantquestion. The tuition payments made on behalf of another individual are excludible for gift tax purposes whether the student is full-time or part-time, whether the qualifying educational organization is foreign or domestic, and whether or not the tuition payment is made for a family member.Jan, an unmarried individual, gave the following outright gifts in 2017:DoneeAmountUse by DoneeJones$18,000Down payment on houseCraig15,000College tuitionKande6,000Vacation tripJan’s 2017 exclusions for gift tax purposes should total$34,000This answer is correct.The unlimited exclusion for amounts paid for qualified tuition and medical expenses on behalf of the donee is allowed only when paid directly to the provider. The annual exclusion of up to $14,000 of gifts of present interest to each donee is available. Since the $15,000 forCraig’s tuition was not paid directly to the college, only $14,000 of the gift is excluded. Jan’s 2017 exclusion is for the value of gifts of $14,000 to Jones, $14,000 to Craig, and $6,000 to Kande.