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

Quizplus · Accepted Answer

When gift splitting, each spouse is considered to have given half of the total gifts. Addison's total gifts are $30,000 + $30,000 + $40,000 = $100,000. Half of this is $50,000. The annual exclusion per recipient is $15,000, so Addison's taxable gifts are $50,000 - (3 x $15,000) = $5,000.

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