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Annual Gift Tax Exclusion

Annual Gift Tax Exclusion

Gifts and the Gift Tax

What is a gift? For IRS purposes, a gift is a transfer of property for less than its full value, and is potentially subject to federal tax. This is the gift tax. The gift tax exists to prevent people from circumventing the estate tax by giving away all their money or other assets (i.e. “gifting” their money) right before they die. It is important to note that the tax is owed by the giver of the gift, not the recipient.

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