"You and your spouse are each entitled to the annual exclusion amount on the gift," the IRS says. Together, you can give as much as $26,000 to each donee this year.
Giving gifts to loved ones is a great thing for many of us. Knowing the basics of the gift-tax exclusion is important when making these plans for the coming year.
For some welcome straight answers on gifts and gift taxes, The Wall Street Journal recently examined the “Basics of the Gift-Tax Exclusion.”
While the original article doesn’t offer exhaustive advice, it provides practical pointers you can use. For example, you can give away a total of $13,000 to your recipients. But remember, anything related to tax planning can have hidden complexities.
After you’ve reviewed the fundamentals of the gift-tax exclusion, a gifting program can be one of the most simple wealth transfer strategies in your estate planning.
Reference: The Wall Street Journal (August 4, 2012) “Basics of the Gift-Tax Exclusion.”