Taxable Gift

A taxable gift is a transfer of assets from one person to another that is subject to gift tax.

The federal annual gift tax exclusion in 2015 allows every person to transfer up to $14,000 per year to each of any number of other people (the $14,000 is indexed for inflation and may change in future years). Transfers above this amount are taxable gifts.

For example, if a father gives each of two sons $50,000, the taxable gifts total:

2 x ($50,000 - $14,000) = $72,000.

If a father and mother give the gifts together, the taxable gifts total:

2 x ($50,000 - $28,000) = $44,000

Transfers to a spouse in which no other person has a subsequent interest are covered by the unlimited marital deduction , eliminating any actual gift tax. The gift tax on taxable transfers to non-spouses may be partially or completely offset by the donor's gift tax credit

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