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15 March, 07:05

Mary and Emile would like to give the maximum possible gift that they can to their son without having to pay gift tax. Mary and Emile have never filed a gift tax return and lie in a community-property state. How much can they transfer in 2014 to their son free of gift tax? A. $28,000B. $2,081,800C. $5,368,000D. $10,708,000

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  1. 15 March, 10:08
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    D: $10,708,000

    Explanation:

    Mary and Emile can each transfer $5,340,000 tax free during their lifetimes. Mary and Emile can also make a gift of $14,000 each during the year to qualify under the annual exclusion. In total to their son, Mary and Emile can transfer (($5,340,000 x 2) + ($14,000 x 2)) = $10,708,000.
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