Question

Question 63 of 75. Which of the following is a taxable gift for gift tax purposes? Transfer of $15,500 from Kevin to his father's bank account to pay his father's unreimbursed medical expenses. O $2,000 contribution to a national political campaign fund. O Transfer of $14,400 to a Coverdell ESA from John, age 30, to his brother Jerry, age 22. O $6,200 payment to State University for tuition on behalf of a grandchild. Mark for follow up

Answer 1

Solution: Transfer of $14,400 to a Coverdell ESA from John, age 30 to his brother Jerry age

Explanation: The taxpayer in 2018 and 2019 are allowed to give $15,000 to each recipient for a sum of $150,000. The balances in a Coverdell ESA need to be disbursed on qualified education expenses by the time the beneficiary attains the age of 30 years or given to another member of family who is below the age of 30 years for the avoidance of penalties and taxes. The exclusion of annual gift is available to each taxpayer; thus transfer of total $14,400 to a Coverdell ESA from John (who is 30 year old) to his brother Jerry (who is 22 year old) is eligible as a taxable gift for purposes of gift tax.