Explain Gift-Tax to me!?
I don’t understand. You have to report any gift over 13,000 dollars to the IRS.
If I gave someone 30,000 dollars as a gift, how much gift-tax would I have to pay?
What is the 1,000,000 lifetime exemption? Does that mean only after I give over a million dollars in my lifetime – then I have to pay gift-tax? So although I report it, I don’t have to pay?
Help!
Thanks guys! Really appreciate the help!
Under current law (2009), up to $13,000 of a “present interest with no strings attached” gift qualifies for the annual exclusion. If you gave $30,000 to someone as a gift, your taxable gift, then, would be $17,000, reported on your Gift Tax return. However, no tax would be due given your $1 million lifetime exemption. You simply “chip away” at your exemption, leaving you an exemption of $983,000 ($1 mil – $17,000), going forward.
Disclaimer. The information in this response is for general purposes only, and shall not be construed as specific tax, legal, or investment advice for any individual. The questioner is urged to contact their own professional advisers before implementing any tax or investment strategy.
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