2) Tax consequences of receiving the 1st annuity payment of $350: Payment Received $350.00 Less: Return of Basis Taxable Amount $350.00 3) The tax consequences of gifting the annuity: Because the monthly straight amount is so low, John would like to know the tax consequences and filing requirements if he gifts this to his granddaughter Sara. Assume that Mary will elect to gift spilt. John and Mary want you to explain any generation skipping tax liability or tax consequences to this gift to Sara. For generation skipping transfer tax purposes, what is the taxable amount of the gift? Please note, do not assume this is being gifted when calculating the gross estate. Total John Mary Total FMV at Time of Gift $0 $0 Less: Gift Tax Exclusion - John Less: Gift Tax Exclusion - Mary Net Taxable gift SO SO SO 4) What tax form is required and when is it due and will generation skipping tax (GST) apply? You recommend a long-term care policy for both John and Mary. The policy is a comprehensive policy that allows each spouse to share the other spouse's policy benefits. The benefits will be paid for 3 years or up to $360,000, whichever come first. The annual premiums are $4,750 for John and $4,000 for Mary. Ignoring any AGI limitation, what amount of the premium is allowed as a medical deduction if the couple itemizes their income taxes in 2019? 5) Allowable Long-Term Care Premium: John Mary Total Total Premium SO Less: Allowed Amount 0 Disallowable Premium Amount $0 $0