You may be surprised to hear that gifts to your children, or to just about anyone else for that matter, are potentially taxable. The reason why you do not hear from the Internal Revenue Service when you give your children birthday gifts is because there are credits or exclusions. Annual Gift Tax Exclusion We have an annual gift tax exclusion that allows you to give most gifts free of the gift tax. The amount of this exclusion in 2014 is $14,000. As a taxpayer you can give as much as $14,000 to any number of people within a calendar year free of the gift tax. This is $14,000 per person, not $14,000 total. Each taxpayer is entitled to this exclusion. As a result, a married couple could combine exclusions and give as much as $28,000 to any number of individuals tax-free within a year. The utilization of the annual gift tax exclusion can be part of tax efficiency strategies for those who are subject to the federal estate tax. You divest yourself of assets throughout your life, giving tax-
Posted on: Sat, 25 Jan 2014 19:38:22 +0000
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