Problem 1

3-May Mr. A Mrs. A

Net Gift 400,000/2 200,000.00 200,000.00
Exemption 250,000.00 250,000.00
Taxable Gift (50,000.00) (50,000.00)

Net Gift this month 500,000.00

Add Net Gift 5/3 200,000.00
Total 700,000.00
Exemption 250,000.00
Taxable Gift 450,000.00
Tax rate 6%
Tax Due 27,000.00

Net Gift this month 400,000.00

Add Net Gift 5/3 200,000.00
Total 600,000.00
Exemption 250,000.00
Taxable Gift 350,000.00
Tax rate 6%
Tax Due 21,000.00

Net Gift this month 400,000.00

Add Net Gift 5/3 200,000.00
Net Gift this 7/14 500,000.00
Total 1,100,000.00
Exemption 250,000.00
Taxable Gift 850,000.00
Tax rate 6%
Tax Due 51,000.00
Tax paid 27,000.00
Tax payable 24,000.00