Gift Giving Tax Basics

by: Bonfiglio & Asterita, LLC.
Bonfiglio and Asterita, LLC NY Attorneys at Law
Bonfiglio and Asterita, LLC NJ Attorneys at Law

Gift Giving Tax Basics

Under the annual gift tax exclusion, you can give gifts of cash or property up to a specified value to as many recipients as you would like with no gift tax consequences. The annual threshold for the exclusion is $14,000 for 2015.

This exclusion amount doubles for joint gifts made by a married couple. Let’s say that you and your spouse have three adult children and seven grandchildren. For 2015, both of you can give each child and grandchild $14,000 to celebrate the holidays — so $28,000 together. Then, in January, you can give each family member another $14,000. In a span of just two months, you and your spouse can reduce your estate by a total of $280,000 ($28,000 in gifts during 2015 times ten recipients).

For recipients, the amount received as a gift doesn’t count as income for tax purposes.

tax basics

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