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Scenario: Your client Mary, a surviving spouse of John, has approached you to provide her with gift and estate planning services. Respond to the following

Scenario: Your client Mary, a surviving spouse of John, has approached you to provide her with gift and estate planning services. Respond to the following questions and submit your answers in a Word Document to the Unit 1 Assignment Dropbox. Remember to review and reference the applicable sections of the Tax Code, including Publications 706 and 709. 1. Based on Marys situation, determine the credit for the gift and estate tax exclusion. Use 2017 indexed exclusion of $5,500,000. Based on your research of the tax code, what is the rationale for the gift and estate tax exclusion? 2. John used $450,000 of his gift and estate tax exclusion for his lifetime gifts. Assuming that Johns estate used $2,300,000 of his estate tax exclusion in closing his estate, determine Mary's estate tax exclusion when she dies if she and her spouse elected to gift split on all taxable gifts. Clearly show your calculations. 3. Mary wants to transfer property into an irrevocable trust she created, but she intends to retain the right to change the beneficiaries. Analyze the circumstances that are required for Marys transfer to be a completed gift. 4. Explain to Mary the gift tax annual exclusion and why it was enacted. 5. Differentiate between a present interest and a future interest. How do they apply to Marys situation?

The Gift Tax Made Simple Updated for Tax Year 2017

OVERVIEW

If you make large enough gifts to relatives or friends, you might owe the federal gift tax. Here are the basics on how the tax works.

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018

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