TAX RETURN SCENARIO Frank R. and Nancy M. Johnson, ages 70 and 65, are retired physicians who live at 527 Montpelier Drive, Austin, Texas 78741. Their 3 adult children (Tony Johnson, Kurt Johnson, and Wendy Thompson) are mature and responsible people. The Johnsons have heard that some in Congress have proposed lowering the Federal gift tax exclusion to $5 million. Although this change likely will not occur, the Johnsons feel they should take advantage of the more generous exclusion available under existing law. Thus, the Johnsons make transfers of many of their high value investments. These and other gifts made during 2021 are summarized below: Donor Asset Transfer Frank Nancy Condominium located in Dallas (TX) acquired in 1999, cost $1.2 million, to Tony, Kurt, and Wendy as equal tenants in common. $1,925,000 $1,925,000 Office building, located in Austin (TX) built in 2001, cost $1.8 million, to Tony, Kurt, and Wendy as equal tenants in common. 2,250,000 2,250,000 ACCT 614 Vacation ranch in San Antonio (TX) inherited by Frank from his father in 1996, value then $900,000, to Tony, Kurt, and Wendy as equal joint tenants with right of survivorship. 2,625,000 0 Nancy used her separate property to reimburse her father (Mark Johnson) for his heart bypass operation. 0 81,000 Paid for daughters (Wendys) wedding to Samuel Thompson. 23,000 23,000 Frank used his separate property to purchase a new automobile (Mercedes) as a graduation present (from medical school) for his favorite niece (Irene Jackson) 40,500 0 An election to split gifts is made. The Johnsons have made no taxable gifts in prior years. Relevant Social Security numbers are 123-45-6789 (Frank) and 123-45-6788 (Nancy). Remember, you will be submitting (2) 709 forms, one for Frank R. Johnson and one for Nancy M. Johnson. ACCT 614 Vacation ranch in San Antonio (TX) inherited by Frank from his father in 1996, value then $900,000, to Tony, Kurt, and Wendy as equal joint tenants with right of survivorship. 2,625,000 0 Nancy used her separate property to reimburse her father (Mark Johnson) for his heart bypass operation. 0 81,000 Paid for daughters (Wendys) wedding to Samuel Thompson. 23,000 23,000 Frank used his separate property to purchase a new automobile (Mercedes) as a graduation present (from medical school) for his favorite niece (Irene Jackson) 40,500 0 An election to split gifts is made. The Johnsons have made no taxable gifts in prior years. Relevant Social Security numbers are 123-45-6789 (Frank) and 123-45-6788 (Nancy). Remember, you will be submitting (2) 709 forms, one for Frank R. Johnson and one for Nancy M. Johnson.