In 2013, Meg, a widow, engages in the following transactions. Only two of the transactions are taxable gifts.
a. Meg names Lois the beneficiary of a $130,000 life insurance policy on Meg’s life. The beneficiary designation is not irrevocable. ($0 amount of completed gift)
b. Meg deposits $60,000 cash into a checking account in the joint names of herself and Joe, who deposits nothing to the account. Later that year, Joe withdraws $11,000 from the account. ($11,000 amount of completed gift)
c. Meg pays $32,000 of nephew Norton’s medical expenses directly to County Hospital. ($0 amount of completed gift)
d. Meg transfers the title to land valued at $95,000 to Keira. ($95,000 amount of completed gift)
First, compute the cumulative taxable gifts.
Items (select all that apply, leave those that don’t blank)
1974 taxable gifts
1998 taxable gifts
2013 taxable gifts
gift tax rate
unified credit available
Cumulative taxable gifts: ________
Select the labels, then enter the amounts and compute Meg’s gift tax liability with respect to 2013 gifts.
Tax at current rates on the cumulative taxable gifts
Minus: Tax at current rates on the cumulative taxable gifts through prior period
Gross tax on taxable gifts made in the current year
Minus: Unified credit available