Everyone seems to know about gifts and gift tax rules. The thing is, “everyone” tends to be wrong.
In this podcast episode, we explain the basics of gifts and gift tax liability. Do you think that there is a rule limiting how much money or property you can give away? There isn’t. Do you think that you will pay a tax on gifts? You won’t — unless you make really huge gifts.
You probably realize that there is a $15,000 limit on how much each person can give to each other person in a calendar year. You may know that the number goes up every few years (the last increase was in 2015). What you may not realize is that the penalty for exceeding that amount is very modest, indeed. Very few people will have any tax or other liability for making larger gifts, as Fleming & Curti, PLC, partner Jacque Mingle explains in a separate video.
That doesn’t mean that it’s a good idea to make gifts. There are other things to consider, like what will happen when the recipient of a gift sells property they have been given. Then there is the key practical consideration: do you really want to give away substantial portions of your assets?