Giving is a real treat for thoseinvolved, especially when gift taxes are avoided for all. But one of thebiggest sources of confusion for the Annual Gift Exclusion is the number ofsuch gifts you can make and to whom you can make them.
A recent Q&A in The Wall Street Journal titled [spoileralert] â€œA Tax-Free Gift Can Go to Anyoneâ€takes this question head on.
So, to whom may you gift assetswithin the exclusion amount? Answer: anyone. That is right, it makes absolutelyno difference whether the objects of your generosity are near or far, family,familiar, or utter strangers. Now, you might not be interested in giving muchof anything to complete strangers â€“ charity aside â€“ but the point is thatgifting is a malleable tool, and something you may work into a much granderplan.
The name of the game isunderstanding the annual gift tax exclusion and your lifetime gift taxexemption.
Every individual can give up totheir annual gift tax exclusion to any other individual, and as many of them asthey care to, all tax free. To give more than the annual amount, however, willcount against your lifetime gift tax exclusion which, in turn, will reduce yourestate tax exemption available at death.
Like most areas of tax law, thetime and money spent consulting with qualified legal counsel now prior toembarking on a gifting strategy will be time and money well spent later on.
For more information on this and otherestate planning subjects, contact IdahoEstate Planning and schedule aconsultation. Remember,good planning is no accident.