Matthew and Addison are married and live in Michigan,a common-law state.For the holidays Addison gave cash gifts of $30,000 to each of her two sons,and Matthew gave $40,000 to his daughter.What is the amount of Addison's taxable gifts if Matthew and Addison opt to gift split?

Question

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When gift splitting, each spouse is considered to have given half of the total gifts. Addison's total gifts are $30,000 to each son, totaling $60,000. Matthew's gift is $40,000. Combined, they gave $100,000. Each spouse is considered to have given $50,000. The annual exclusion per recipient is $16,000, so Addison's taxable gifts are $50,000 - (3 x $16,000) = $2,000 per recipient, totaling $8,000.

Matthew and Addison Are Married and Live in Michigan,a Common-Law