Gift Taxes: An estate
worth less than $800,000
Can a gift be made to an adult son in
the amount of $55,000 in a lump sum without a liability to pay gift tax on the
Thanks. -- Jewel
I gather the gift is not the gift of gab. I like these straight-to-the-point
questions. A gift from any one person of more than $11,000 to any one person (other
than a charitable organization or your spouse) is reportable on Form
A husband and wife can each give $11,000 to a child
without reporting the gift, and if the child is married, the same can be given
to the spouse by each parent (bringing the total to $44,000). Any amount in excess
of the exclusion is subject to gift tax, but since there is a tax credit available,
no tax will actually be paid.
The tax credit is equivalent
to the tax that would be due on $1,000,000 in reportable gifts. It's worth noting
that the gift tax exclusion used to be equivalent to the estate tax exclusion,
but as the estate tax exclusion increases in the next few years until its repeal
in 2010, the gift tax exclusion will remain at $1,000,000.
your total estate is under $1,000,000, there's no immediate concern in using the
gift tax exclusion. The amount of exclusion that you currently utilize will reduce
the amount available to your estate, but there's no real issue since the estate
tax exclusion is increasing and is scheduled to eventually be repealed.
709 is due on April 15 following the year of the gift.