More importantly, these transfers escape the gift tax without consuming my part of the donor's annual exclusion
or unified Credit.(377) Consequently, a taxpayer may give each of his children $10,000 per year and pay their unreimbursed medical expenses and College tuition Without incurring gift tax.(378)
2503(c); i.e., such a provision will not negate the opportunity to benefit from the annual exclusion
with respect to gifts to the trust.
For law students, this text explains estate and gift taxation in the US, covering basic topics in the transfer tax system, such as the computation of estate, gift, and generation-skipping transfer taxes; the gift tax annual exclusion
; the estate and gift tax marital deductions; and the estate and gift tax implications of transfers which retain powers or interests.
If this is not practical, the spouses can get the benefit of a $30,000 annual exclusion
by electing "gift splitting" on Form 709.
On their separate Forms 709, United States Gift (and Generation-Skipping Transfer) Tax Return, each taxpayer claimed a $12,000 annual exclusion
for a gift of a present interest to each of the 60 beneficiaries.
(22) It proposes: (1) an exclusion from the gross estate for insurance proceeds on the life of the decedent in limited situations; and (2) an alignment of the section 2503(b) (23) annual exclusion
amount with the section 2514(e) (24) safe harbor for lapsing powers of appointment for purposes of ILITs.
For 2013, an individual may give away an annual exclusion
amount of $14,000 of wealth in any form to another.
That permits leveraging of the annual exclusion
and $5.25 million applicable exclusion.
In 2002, for the first time, the annual exclusion
was adjusted upward for cost-of-living increases, from $10,000 in 2001 to $11,000 in 2002, reflecting the level of inflation.
Gifts of a present interest less than the annual exclusion
need riot be reported on Form 709, but the donor should keep a record of the valuation of such gifts in case of IRS inquires.
ISSUE: Valuing interests in a small business can present a significant challenge to an owner looking to take advantage of today's high gift tax annual exclusion
rates--and frequent IRS challenges to professional appraisals has made valuing these interests even more uncertain.
* Take advantage of your annual exclusion
. Each year you can give $13,000 ($26,000 for a couple) to anyone without incurring gift tax.