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.
