An Explanation of Gift Taxes

Sabrina Winters — Thu, 06 May 2010 14:30:31 +0000

Each person may gift up to $13,000 per individual per year in 2010. A married couple may gift up to $26,000 per individual per year in 2010. These amounts are exempted gifts. Each person is allowed $1 million lifetime gifting.

If more than $13,000 is gifted to one individual in one year, the person making the gift (the donor) must file a gift tax return in that year. As long as he has reached his lifetime amount, no tax is due. The amount of the gift reduces the federal estate tax exclusion amount by the amount of the gift ultimately.

What is a Gift Tax Annual Exclusion?

Sabrina Winters — Thu, 20 Aug 2009 17:00:00 +0000

The Gift Tax annual exclusion in 2009 is $13,000. This allows an individual to gift up to $13,000 of cash property per year to each child (or any other person), free of any gift tax. If you are married, you can gift $26,000 per year, per person tax-free. This could be from your property, your spouse’s or both; the limit is $26,000 in total. Gifts to pay tuition or medical expenses can be in addition to this.

However, this exclusion is not automatic. The gift must be given in such a way as to constitute a “present interest”. A direct, outright gift, or gift in custodianship qualifies. But, a gift in trust will not qualify unless the beneficiary has the right to withdraw the gifted amount from the trust. Even a minor beneficiary must be given the legal right to withdraw, though that right would not be exercised as a practical matter.

Charlotte, North Carolina Estate Planning Attorney » annual gift tax

An Explanation of Gift Taxes

What is a Gift Tax Annual Exclusion?