[myoungii]

I would like to precede the question that this is not a homework assignment but it does deal with my federal taxation class.

The first part of my class deals with Individual taxes and I was reading the section of the first chapter dealing with the Federal Gift Tax. I understand that there is an exclusion of 13,000 per year per donee. I however was looking over the example in the book and I am a bit to confused or I am over thinking it. Here is the text

Antonio makes the following gifts in the year of 2009:
$25,000 cash gift to his wife
15,000 contribution to the United Way
Gift of a personal automobile valued at $25,000 to his adult son
Gift of a personal computer valued at $4,000

The gift to his wife is not taxed because of a 13,000 annual exclusion and a 12,000 marital deduction. The $15,000 contribution is also not taxed because of the unlimited deduction for charitable contributions. The $25,000 gift Antonio made to his son is reduced by the $13,000 annual exclusion to each donee, leaving a $12,000 taxable gift. The $4,000 gift to the friend is not taxed because of the annual exclusion of up to $13,000 in firs to a donee in a tax year. Thus, total taxable gifts for the current year subject to the unified transfer tax are $12,000.

First question first the marital deduction for gifts to spouse is there a limit on the deduction that can be claimed. Secondly wouldn't this conflict with state legislation relating to like Wisconsin's Marital Property Act which grants a one-half interest in all marital property. I understand that Federal legislation supercedes state legislation.

My second question is referring to a footnote about the gift of the vehicle to Antonio's son:

This example assumes that the automobile is a gift rather than an obligation of support under state law and also assumes that Antonio's wife does not join with Antonio in electing to treat the gift to the son as having been made by both spouses ( a gift-splitting election). In such event, donee exclusions of $24,000 (2 X $12,000) would be available, resulting in a taxable gift of only $1,000.

I am thinking they may have a typo in their footnote because the book states that the for 2009 and later years, the current exclusion has been increased to $13,000. If it is not an error on the part of the publisher is their a decrease in the exclusion per donee based on the gift-splitting election?

[AtlantaTaxExpert]

First, there is NO limit as to how much one spouse can gift to the other spouse, as long as boht spouses are U.S. citizens or resident aliens. There ARE limitations when the spouse receiving the gift as a non-resident alien.

Second, the Wisconsin law only affects how Wisconsin taxes the transaction; it has NO effect on federal GIFT tax law.

Finally, I agree that the footnote has a type; the exclsuion for 2009 is $13,000 per parent.