Why You Should Make Annual Exclusion Gifts Before Year End

Posted on 12.18.14

Gift Tax - Richmond Tax Planning The 2014 gift tax annual exclusion allows you to give up to $14,000 per recipient tax-free without using up any of your lifetime gift tax exemption. If you and your spouse “split” the gift, you can give $28,000 per recipient.

The gifted assets are removed from your taxable estate, which can be especially advantageous if you expect them to appreciate. That is because the future appreciation can avoid gift and estate taxes.

The exclusion is scheduled to remain at $14,000 ($28,000 for split gifts) in 2015. But that is not a reason to skip making annual exclusion gifts this year. You need to use your 2014 exclusion by Dec. 31 or you will lose it.

The exclusion does not carry from one year to the next. For example, if you do not make an annual exclusion gift to your daughter this year, you cannot add $14,000 to your 2015 exclusion to make a $28,000 tax-free gift to her next year.

We can help you determine how to make the most of your 2014 gift tax annual exclusion.

Source: PDI Global