One of the most effective tax planning involves making gifts to your beneficiaries during your life. For 2011 and 2012, the annual gift tax exclusion is $13,000, with life time gift tax exclusion of $5 million. You may give up to $13,000 a year in cash or asset to anybody without any gift tax.
For example, you and your spouse give $26,000 this year to each of your children, you pay no gift tax because of the annual gift tax exclusion. Even if you give more than the exclusion amount to a single person this year, you might not owe any gift tax. For example, you and your spouse give $100,000 to help your child for a down payment to buy a house. You will have to file a gift tax return to keep track of the additional amount of $74,000 from the lifetime gift tax exclusion amount of $5 million, but pay no gift tax this year.
No comments:
Post a Comment