[quote=SK in CV][quote=evsdca]Currently, if your annual gift to any single person is $13,000 or less, you are in the annual gift exclusion meaning you are not required to file a separate tax return to report tax on your gifts. However, if your give to anyone is more than $13,000, you have to file separate tax return (Form 709) to report your gifts, but it doesn’t mean that you have to pay tax unless you already used up all your unified credit. Every US citizen has $345,800 of unified gift credit which mean you can give up to $345,800 (your first $13,000 for each person every year is always excluded) before you start paying tax on your gift. You must take any availabel unified credit against gift tax until it all exhausted. I hope it is not too confused. As alway, consult your tax specialist.[/quote]
Dude, you are so close! You’re right on the unified credit. (at least I think you are, it’s somewhere in that neighborhood anyway). But it’s a tax credit, not the amount of the effective gift exclusion. The first $1,000,000 of lifetime gifts in excess of the annual exclusion is exempt from tax. The $34X,XXX of tax credit is equal to the tax on $1,000,000 of reportable gifts.
As to the question posed in the post, beware of SSI rules. No idea if it’s still true, but at one time gifts had to be reported in an annual SSI declaration and can put recipients at risk of losing SSI benefits if those gifts exceeded specified limits. Obviously there are ways around those rules, but be careful. You don’t want to get caught defrauding the government.[/quote]
Ok, so someone mentioned about this $1m limit and I thought he/she was blowing smoke. Thanks SK for the confirmation. Question: is this per giftee or total gifts given out. Got a quicky linky to the tax rule publication?
