A married couple with 2 children and 5 grandchildren has an estate valued at $4 million.They decide to use gifts as a means to transfer some of their wealth to their family now and lower the value of their estate.If for a five-year period the couple give the maximum tax-free gift to each of their children and grandchildren,the value of their estate would be reduced to

Question

Quizplus · Accepted Answer

The maximum tax-free gift that can be given to each individual is currently $15,000 per year. If the couple gives $15,000 to each of their 2 children and 5 grandchildren for 5 years, the total amount given would be: 
$15,000 x 7 recipients x 5 years = $525,000 
Subtracting this from their original estate value of $4 million, the new value would be: 
$4 million - $525,000 = $3,475,000 
Therefore, the best choice is C as it is the closest option to this calculated value.

A Married Couple with 2 Children and 5 Grandchildren Has