Philadelphia PA Estate Planning Blog

Thinking about making a gift in 2013? The rules have changed a bit since 2012 and years past. Each person has an annual gifting exemption and a lifetime gifting exemption. 

Annual Gifting Exemption: $14,000/Per Year

• Each year, you can give $14,000 to an individual, tax-free to you and the individual. 
• You can give to multiple people per year, so for instance, with 3 kids, you can give $42,000 total to the three.
• If you're married, you can double your gifts. Therefore, you and a spouse can give $28,000 to each child.
• For example, with three children, you could gift $84,000 total per year under the annual gifting exemption.

Lifetime Gifting Exemption: $5 Million/Lifetime

• You can give OVER $14,000 per person.
• Hwever, any gift over that amount would trigger an IRS filing (Form 709) and the amount above $14,000 would count towards your $5 million lifetime exemption.
• Just to be clear, the gifts of $14,000 or under do not count towards that lifetime exemption, so you have a LOT of opportunity for tax-free gift-making.

Income Tax Liability on Gifts: 

• There is no income tax liability to the kids for the gifts.
• Obviously, what the person receiving gifts does with those gifts could generate taxes if they invest it, etc.

Contact us today at (215) 706-0200 for more gifting help.