5 This year Samantha gave each of her 3 nephews birthday gif

5. This year Samantha gave each of her 3 nephews birthday gifts of $10,000 in cash. At Christmas, Samantha gave each of her 3 nephews Chrismas gifts of an additional $5,000 in cash. What is the amount of the taxable gifts, if any made by Samantha this year?

Multiple Choice

A. $3,000

B. $32,000

C. $45,000

D. Zero- None of the gifts exceed the annual exclusion.

E. None of hte choices are correct.

Solution

Solution:

Total value of gift given to each nephew = $10,000 + $5,000 = $15,000

As per taxation provision gift is tax free if no one receives more than $14,000 during the year.

Therefore in this case, gift received by each nephew is more than $14,000 and amount of taxable gift made by samantha this year = ($15,000 - $14,000) * 3 = $3,000

Hence option A is correct.