Charlie makes the following gifts in the current year: $40,000 to his spouse, $30,000 to his church, $18,000 to his nephew, and $25,000 to a friend. Assuming Charlie does not elect gift splitting with his wife, his taxable gifts in the current year will be

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The annual gift tax exclusion is $15,000 per donee. Charlie's gifts to his spouse and church are not taxable because they are within the annual exclusion. His gifts to his nephew and friend are taxable because they exceed the annual exclusion. The total amount of Charlie's taxable gifts is $13,000 ($18,000 - $15,000 + $25,000 - $15,000).

Charlie Makes the Following Gifts in the Current Year: $40,000