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Ms. Poppe, a single taxpayer, made three gifts this year: $6,300 cash to her niece; $50,000 cash to Yale University; and 5,000 acres of land to her brother. Ms. Poppe's tax basis in the land was $400,000, and its fair market value of date of gift was $615,000. Compute Ms. Poppe's taxable gifts for the year.

Answer :

Ms. Poppe is taxable for two gifts which are $50,000 cash to Yale university and 5,000 acres of land to her brother.

Are gifts taxed in the US?

  • The annual gift tax exclusion is the initial way of tax-free gifting.
  • The exclusion threshold is $15,000 per beneficiary in 2021 and $16,000 in 2022.
  • Without incurring any estate or gift taxes, you are permitted to give any individual up to $15,000 in cash and other assets each year.
  • Ms. Poppe gifted $6,300 to her niece which is a non-taxable gift as the cash is less than $16,000.

Therefore, Ms. Poppe is taxable for two gifts which are $50,000 cash to Yale university and 5,000 acres of land to her brother.

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