{"id":1592,"date":"2018-12-21T13:49:31","date_gmt":"2018-12-21T13:49:31","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=1592"},"modified":"2018-12-21T13:50:02","modified_gmt":"2018-12-21T13:50:02","slug":"annual-life-time-gift-tax-exemption-simplified","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/annual-life-time-gift-tax-exemption-simplified\/","title":{"rendered":"Annual & Life Time Gift Tax Exemption Simplified !"},"content":{"rendered":"

\"\" <\/picture><\/a>Let me start with very basic question – what is a gift<\/a> tax ? \u00a026 U.S. Code Chapter 12 <\/a>– GIFT TAX\u00a0deals with all aspects of gifts and its taxation under Internal Revenue Code and it basically says that\u00a0 if you\u00a0 gift money<\/em> or transfer property to another person without any consideration in return, you will have to pay tax on the amount of gift . But , the imposition of tax on such gifts is only if the amount of gift is more than the two limits set under the law – annual gift tax exemption limit of $ 15,000 and lifetime gift tax exemption<\/strong> limit of $11.4 million.\u00a0<\/p>\n

How the annual gift tax exclusion works<\/h2>\n

Gifts that are eligible for the\u00a0annual $15,000 exclusion\u00a0apply only to gifts of present interest, meaning that the receiver can enjoy and use the property, and income, now. Gifts of future interests — meaning the receiver\u2019s use of the property will not begin until some future date \u2013 do not qualify. Examples of future interests include reversions, remainders, and other similar interests<\/p>\n

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  1. You can give up to $15,000 to someone in a year.If you give more than $15,000 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you need to file a gift tax return.<\/li>\n
  2. The annual gift tax exclusion is per person basis which means that you can give upto $15,000 to more than one persons. Say , you gave $14,000 to ten persons in a year. You need not file gift tax return.<\/li>\n
  3. Since the annual gift tax exemption is allowed per person wise , a married couple can give away a combined $30,000 a year without any need to file a gift tax return<\/li>\n<\/ol>\n

    What is lifetime gift tax exclusion and how it works?<\/h2>\n

    The annual gift tax exemption<\/a> amount means that you can donate up to<\/strong> $15,000 per year to as many individuals as you want without filing a gift tax return. You can exclude<\/em> that $15,000 from a gift tax return.\u00a0However, if you give anyone more than $15,000 in a year , you need to report gifts over the annual exclusion amount on a gift tax return (IRS Form 709<\/a>) but\u00a0need not pay any tax on the excess amount of gift , if the total gift given till that year does not cross the lifetime gift tax exclusion limit<\/p>\n

    The lifetime gift tax exemption limit is set considerably high at $ 11.4 million for the tax year 2019 ( lifetime gift tax exemption 2018<\/em>was at $11.18 million)<\/em> . Further , exclusion limit of\u00a0 $11.4 million is set per person<\/strong> which means\u00a0 married couples can exclude upto $ 22.8 million of\u00a0 lifetime gifts.<\/p>\n

    What is the gift tax rate?<\/h3>\n

    The gift tax rates range from 18% to 40%,\u00a0 .Please\u00a0 so see the\u00a0instructions to IRS Form 709<\/a>\u00a0for gift tax rate table and various exception .<\/p>\n","protected":false},"excerpt":{"rendered":"

    When you give gift to anyone , the question “how much is the gift tax” is natural to arise in donor’s mind . But dont worry , because most of the time , there will not be an issue on account of life time gift tax exemption limit set under the law that has to be seen along with annual gift tax exemption limit<\/p>\n","protected":false},"author":1,"featured_media":1595,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[44],"tags":[626,624,625,621,619,622,623,620,627,628],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/1592"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=1592"}],"version-history":[{"count":0,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/1592\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/1595"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=1592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=1592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=1592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}