Rule: Every transfer of money or property, whether real or personal, tangible or intangible, for less than adequate or full consideration is a gift. There are four items that qualify for unlimited exclusion from gift tax and qualify to be excluded from being reported on a gift tax return: (1) payments made directly to an educational institution for a donee's tuition, (2) payments made directly to a health care provider for medical care (3) charitable gifts, and (4) marital transfers. Relationship of the donee to the donor is not of consequence.

Choice "b" is correct. While payments made to the university for a cousin's tuition would be excluded from the requirement to file a gift tax return, the direct payment to the university for room and board is considered a gift and would require the filing of a gift tax return.

Choice "c" is incorrect. Per the above rule, payments made directly to an educational institution for a donee's tuition qualify for exclusion from gift tax and from the gift tax return filing requirement.

Choice "d" is incorrect. Per the above rule, payments made directly to a health care provider (e.g., a hospital) for medical care qualify for exclusion from gift tax and from the gift tax return filing requirement.

Choice "a" is incorrect. Per the above rule, payments made directly to a health care provider (e.g., a physician) for medical care qualify for exclusion from gift tax and from the gift tax return filing requirement.