The correct answer is:
C. Tommy: none; grandparents: gift tax
Tommy does not have to pay taxes on the gift he received, but his grandparents may be subject to gift tax if the amount exceeds the annual gift exclusion limit.
Tommy's grandparents recently gave him a check of $25,000 to support him through his years at college. Which tax might Tommy or his grandparents have to pay?
A.
Tommy: none; grandparents: inheritance tax
B.
Tommy: gift tax; grandparents: none
C.
Tommy: none; grandparents: gift tax
D.
Tommy: Inheritance tax; grandparents: none
1 answer
The correct answer is:
C. Tommy: none; grandparents: gift tax
Tommy does not have to pay taxes on the gift he received, but his grandparents may be subject to gift tax if the amount exceeds the annual gift exclusion limit.