Finra Exam Series-6 Topic 6 Question 104 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 104
Topic #: 6

Phil Anthropy wrote his cousin a $15,000 check to pay for medical bills the cousin had accumulated. He also distributed $5,000 checks to three nephews who were in college, and gave his mother a check for $12,000.

Have Phil's actions triggered any gift taxes?

AYes, $19,000 of his total distributions is subject to the gift tax.

BYes, $2,000 of his total distributions is subject to the gift tax.

CYes, $7,000 in distributions is subject to the gift tax.

DNo. None of Phil's distributions is subject to the gift tax.

Show Suggested Answer

Suggested Answer: B

Yes. If Phil gives his cousin a $15,000 check, three nephews $5,000 checks, and his mother a check for $12,000, $2,000 of his total distributions is subject to the gift tax. The current annual gift tax exclusion is $13,000 per person, and he has exceeded that by $2,000 with the check he wrote to his cousin. Had Phil written the check directly to his cousin's medical care provider, no gift taxes would have been due on any of that amount either.

by Harrison at Jul 12, 2025, 12:14 AM

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Coral

7 days ago

I think the answer is C. $7,000 in distributions is subject to the gift tax. The annual gift tax exclusion is $16,000 per recipient, so the $15,000 check to his cousin and the three $5,000 checks to his nephews are all exempt from the gift tax.

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