In 2014, the annual gift tax exemption is $14,000. Therefore, an individual can gift to another individual up to $14,000 this year without having to file any forms with the Internal Revenue Service. This amount is adjusted each year based on inflation.
In 2014, the lifetime gift exclusion, which is tied directly to the estate tax gift exclusion is $5,340,000. This means that an individual can either gift $5,340,000 during his or her lifetime without being assessed any tax, exclude $5,340,000 of his or her estate from estate tax at death, or any combination of the two, so long as the value does not exceed $5,340,000 in 2014. This amount is also adjusted annually for inflation.
Contact an Estate Planning Attorney
Gifting can be a great strategy to decrease your estate over time. However, prior to making large gifts, it is advisable to consult with a professional estate planning and gifts attorney to ensure that everything is done properly and on time. Contact us today.