Finra Series-6 Exam - 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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Ressie

2 months ago

Agree with A, those amounts definitely trigger gift tax.

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Donette

2 months ago

I think option A is correct, that’s a lot of money!

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Earleen

3 months ago

Wait, are you sure none of it is tax-free? Sounds off.

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Rosalyn

3 months ago

Isn’t there a lifetime exclusion that might apply here?

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Regenia

3 months ago

Phil's total gifts are over the annual exclusion limit.

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Wynell

3 months ago

I feel like the $12,000 to his mom might not count, but I can't remember if there's a special rule for family members.

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Viva

4 months ago

I'm not entirely sure, but I think the total gifts add up to more than the exclusion, so there might be some tax due.

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Tresa

4 months ago

I remember a practice question where we had to calculate the total gifts and see if they exceeded the exclusion limit. This feels similar.

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Evelynn

4 months ago

I think the annual gift tax exclusion is $15,000, so maybe only the amount over that is taxable?

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Fredric

4 months ago

I've got a strategy here. First, I'll calculate the total amount of the distributions. Then, I'll see how much of that falls under the annual exclusion and lifetime exemption. That should give me the answer.

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Catherin

4 months ago

I'm a bit confused on this one. The question mentions "any gift taxes," so I'm not sure if that means any amount over the annual exclusion or something else. I'll need to double-check the gift tax rules.

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Casandra

4 months ago

Okay, let's see. The total distributions are $15,000 + $5,000 x 3 + $12,000 = $37,000. I think the key is figuring out how much of that is subject to the gift tax.

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Dudley

5 months ago

Hmm, this seems like a tricky gift tax question. I'll need to carefully review the details and think through the annual exclusion and lifetime exemption rules.

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Lenna

5 months ago

I'm leaning towards option A as well, $19,000 seems like a reasonable amount.

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Lashanda

5 months ago

I think it's possible that only $2,000 of his distributions is subject to the tax.

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Amie

6 months ago

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

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Pamella

6 months ago

I agree, but I'm not sure how much of it is subject to the tax.

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Onita

7 months ago

I'm going with B. $2,000 of his total distributions is subject to the gift tax. The $12,000 check to his mother exceeds the annual exclusion, so that portion would be taxable.

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Lenna

7 months ago

I think Phil might have triggered gift taxes.

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Lavonna

7 months ago

Hmm, I'm not sure about this one. Maybe I should have paid more attention in my tax law class. *chuckles*

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Sina

5 months ago

A) Yes, $19,000 of his total distributions is subject to the gift tax.

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Tamekia

7 months ago

D seems like the right answer to me. None of Phil's distributions are subject to the gift tax since they're all below the annual exclusion amount.

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Marjory

7 months ago

D seems like the right answer to me. None of Phil's distributions are subject to the gift tax since they're all below the annual exclusion amount.

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Alisha

7 months ago

A) Yes, $19,000 of his total distributions is subject to the gift tax.

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Coral

8 months 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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