Based on the facts summarized below, use two gift Tax Forms 709 to complete the appropriate gift tax returns for Mr. and Mrs. Smith for calendar year 2018 for which each is required to file.

They want to keep any gift tax liability as low as possible as a family group for the current and future years. “NYSE” means the stock is traded on the New York Stock Exchange.

John F. Smith

a. 6/29/18: John and Janet purchased $30,000 of MNO Company common stock (NYSE) and immediately had it recorded in their joint names as “John and Janet as joint tenants, with right of survivorship.” John furnished $10,000 from his separate funds and Janet furnished $20,000 from her separate funds.

b. 7/10/18: Transferred 200 shares of XYZ Company common stock (NYSE)
to son James. Fair market value was $30,000. It was purchased 5/1/74 for $9,000. It was previously registered in John’s name only.

c. 8/1/18: Purchased 1,000 shares of ABC Company common stock (NYSE) for $52,000 and immediately had it titled in the names of “Joseph and Barbara Smith, as joint tenants with right of survivorship” (son and daughter-in-law).

d. 9/14/18: Deposited $15,000 as a birthday gift in savings account of nephew Richard Osco, account titled in Richard’s mother’s name as custodian under his state’s Uniform gifts to Minor Act.

e. Taxable gifts made in prior years: In 1970, gave away 1,000 shares of DEF Company common stock (closely held company). Fair market value at date of gift was $93,000. John inherited these from his father who died 3/31/60 when they were worth $29,000. John claimed one exclusion, used his lifetime (specific)
exemption, and paid $7,125 in gift tax (no marital gift splitting elected).

Janet B. Smith

a. 4/30/18: Gave a Flymore sailplane to her husband, who is an enthusiast of this sport, for their wedding anniversary. Purchase cost was $37,000.
She used her own funds from a separate checking account.

b. 6/29/18: See John’s Item A.

c. 7/15/18: Gave check for $20,000 made payable to “William and Barbara Zuck”
(son-in-law and daughter).

d. 2/10/18: Janet transferred, in trust, $500,000 of Georgia Power Bonds to her younger sister, Bertha Jones. These bonds pay interest quarterly, and Janet reserved the income for her life. Janet was age 60 at the time oft he gift. Assume the remainder interest is .25509.

e. Taxable gifts made in prior years: On 12/1/76, gave away 250 shares of STU Company common stock (NYSE). Fair market value date of gift was $32,000.
Janet received these as a gift from her uncle in 1960. The fair market value then was $40,000. Uncle paid no gift tax. He had purchased them in 1955 for $36,000. Janet claimed one exclusion and used her lifetime (specific)
exemption to avoid paying any gift tax (no marital gift splirting elected).