Shaquille buys new cars for five of his friends.Each car cost $70,000.What is the amount of Shaquille's taxable gifts?

Question

Quizplus · Accepted Answer

Shaquille's taxable gifts are calculated by subtracting the annual gift tax exclusion from the total gift amount. In 2023, the annual gift tax exclusion is $17,000 per recipient. Therefore, for five friends, the exclusion is $85,000 ($17,000 x 5). The total cost of the cars is $350,000 ($70,000 x 5). The taxable gifts amount to $350,000 - $85,000 = $265,000.

Shaquille Buys New Cars for Five of His Friends