Question

Your client and her husband agreed to split the following lifetime cash gifts: Total Gifts to Son Total Gifts to Daughter 2014 $90,000 $70,000 2021 $80,000 $100,000 How much of your client's applicable credit is used by the 2021 gifts only

Answer 1

Based on the Unified Federal Estate and Gift Tax Rates table, the amount of your client's applicable credit used by the 2021 gifts only is D) $11,080.

What is the applicable gift tax credit?

The applicable credit allows a taxpayer to transfer a certain amount of assets during their life without incurring the gift tax.

The unified tax credit for a couple filing jointly for 2021 is $30,000.  Based on the Unified Federal Estate and Gift Tax Rates table, the applicable credit for 2021 is $11,080 ($30,000 x 36.93%).

Data and Calculations:

Year     Total Gifts to Son   Total Gifts to Daughter   Total Gifts

2014                   $90,000                          $70,000    $160,000

2021                   $80,000                        $100,000    $180,000

Applicable credit for 2021 = $30,000

Gift usage of the applicable credit = $11,080 ($30,000 x 36.93%)

Answer Options:

A) $16,320

B) $24,400

C) $58,800

D) $11,080

Thus, based on the Unified Federal Estate and Gift Tax Rates table, the amount of your client's applicable credit used by the 2021 gifts only is D) $11,080.

Learn more about tax credits at brainly.com/question/2142559