bernard made a gift of $500,000 to his brother in 2014. Due to Bernard’s prior taxable gifts he paid $200,000 of gift tax. When Bernard died in 2019, the applicable gift tax credit had increased. At Bernard’s death, what amount related to the $500,000 gift to his brother is included in his gross estate?

$0 is the amount related to the $500,000 gift to his brother that would be included in his gross estate

Explanation:

In this question, we are expected to determine the amount related to the $500,000 gift to his brother is included in Bernard’s gross estate.

The amount related to the $500,000 gift that is included in the gross estate is $0.

We shall be giving the reason for our answer based on time-scale difference.

The difference in the number of years between when the amount was gifted and when Bernard died is 5 years(2015-2019)

It should however be noted that it is only gift tax on gifts within 3 years of death is included in gross estate according to law.

Now, because this gift we are talking about was made more than 3 years before death, $0 is what will be included in Bernard’s gross estate as regards this particular gift.

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