Be More Generous and Pay Less Tax!

New tax law changes dramatically increase the amount of property one can leave to others before federal estate / gift taxes are due.  Now technically even the most miserly among us gives away 100% of assets at death, but the most generous often plan to give away property during their lifetime. 

Very generally speaking, the IRS requires taxpayers (or their estates) to add up EVERYTHING they gave away during their lifetime and EVERYTHING they gave away at death. For many years this figure hovered under $1 million before rising to around $5 million.  Now, only if that amount exceeds $10 Million (in 2018) will federal estate/gift tax be due. 

Even if tax is not due, a tax return might be.

During one's lifetime there is a requirement to report gifts of over $14,000 or $15,000 (the higher number in 2018) in a tax year to a single recipient.  In other words, you can give someone property worth up to $15,000 (or $30,000 if your spouse joins in the gift) without reporting the gift.  There is an unlimited exception for gifts to one's spouse, but gifts to others (children, siblings, friends, etc.) must be reported if over the annual exclusion.   

© ArdenLawFirm 2014-2018  Managing Attorney Cedulie Laumann, Esq.