Reference no: EM132835452

Problem 1: A taxpayer has made numerous gifts of various amounts, ranging in value from $1,000 to $15,000. The taxpayer wants to know the amount given to each recipient that is not included in the total amount of gifts made during the year. Which code section, subsection, and paragraph indicates the amount of each gift given that may be excluded from the total value of the gifts made during the year?

Cook made the following gifts during year 3:

1. $18,000 for medical expenses paid directly to a hospital on behalf of Cook's friend, Martin.
2. $45,000 for tuition paid directly to an accredited university of Cook's niece, Tessie.
3. $150,000 for campaign expenses paid to a political organization.
4. $16,000 to pay a credit card balance on behalf of Cook's friend, Chris.

Problem 2: Assuming the gift tax exclusion is $15,000, which of the gifts made by Cook require him to file a gift tax return for year 3?

A. The payments on behalf of Martin and Chris

B. The payment on behalf of Martin and the payment to the political organization

C. The payment to a political organization

D. The payment on behalf of Chris