1. What kinds of gifts are subject to federal gift tax?
What will be an ideal response?
From the IRS website: “The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.
? Gifts that are not more than the annual exclusion for the calendar year.
? Tuition or medical expenses you pay for someone (the educational and medical exclusions).
? Gifts to your spouse.
? Gifts to a political organization for its use.
? Gifts to qualified charities (a deduction is available for these amounts).”
The annual exclusion rate in 2013 is 14,000 and the top tax rate is 40%.
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What will be an ideal response?
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Fill in the blank(s) with the appropriate word(s).
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What will be an ideal response?