Prepare a gift tax return form (Form 709) for 2012 for Theresa Stone. Theresa and her husband, Adolf Stone, reside at 1325 Apple Lane, Brandon, FL 33511 and want to elect gift splitting. Both are U.S. residents. For simplicity, assume that the Sec.7520 rate is 4%. Theresaâ€™s transactions (all in August) are shown below. Page 4 of the form does not apply to Theresa.
1. Stock given to son, Stanley stone $52,000
2. Land given to daughter, Eliza Stone 84,000
3. Medical expenses paid to city Hospital for Adolfâ€™s unemployed 38,000
Nephew, Dudley Stone
4. Cash paid to First Methodist Church for building fund 28,000
5. Stock given to charitable remainder trust with remainder to American 120,000
Cancer Society and an annual annuity of $8,000 for life to Theresaâ€™s
Mother, Audrey Alsup (age 82); Bank Three is trustee
6. Stock given to Bank of Florida as trustee with all the income payable 200,000
Annually to Adolf Stone (age 58) for life and remainder to daughter,
Betsey Stone-Marbelle (age 30).
During 2012,, Adolf gave Stanley Stone cash of $30,000 and did the same for Eliza Stone. Theresaâ€™s previous taxable gifts consisted of a $120,000 taxable gift made in 1998 and a $60,000 taxable gift made in 2003. Adolf made a $210,000 taxable gift in 2001.