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 per year is $15,000 (as of 2021). The couple has 2 children and 5 grandchildren, so they would be able to give a total of $15,000 x 7 = $105,000 per year. Over a five-year period, this would amount to $525,000. If we subtract this amount from the initial estate value of $4 million, we get $3,475,000. Therefore, the value of their estate would be reduced to $3,475,000, which is closest to answer choice C.

A Married Couple with 2 Children and 5 Grandchildren Has