Jane and Arthur Patrikson are happy that their daughter is graduating from high school. They gift their daughter $25,000, with $12,500 being paid out of Mr. Patrikson's account and the remaining from Mrs. Patrikson's account. What will be the gift tax payable by the Patriksons on account of the above transaction?

Question

Quizplus · Accepted Answer

The gift tax exemption amount for 2021 is $15,000 per person per year, which means that an individual can gift up to $15,000 to any person without having to pay any gift tax. In this case, Jane and Arthur Patrikson gifted their daughter $25,000, which exceeds the exemption amount. However, they can take advantage of their lifetime gift tax exemption of $11.7 million, which means they will not owe any gift tax on the $25,000 gift to their daughter. Therefore, the answer is E, $0.

Jane and Arthur Patrikson Are Happy That Their Daughter Is