Ask Terry Questions Annual gift tax exemptions

Annual gift tax exemptions

By Terry Savage on June 01, 2019 | Wild Card

Hi Terry, my adult daughter is going through a rough time and I would like to give her some financial help substantially over the $15,000 limit without paying the gift tax. I have tried to read the irs code regarding life time giving limits and generation skipping (form 709) but can’t understand the irs instructions. Is there a more simpler publication or article available to help me understand the rule. My interpretation of the rule is that I am allowed to give her up to 5 million tax free over my life time, in any amount, as long as I file form 709 in the year that I give it. Thank you very much.

Terry Says

You are correct that you should file a Form 709 for a year in which you give more than the current $15,000 gift tax exemption.  (If you are married filing jointly, you can give $30,000.)  BUT you are a bit out of date regarding the total lifetime gifts that you can make under the combined gift and estate tax.  The exemption is currently $11.4 million! –except to your spouse, where you can make an unlimited gift.  I hope that covers Your daughter’s problems.

Note, that you don’t have to pay taxes when you file this form.  It’s just a way of keeping track of the gifts you make during your lifetime, and those you make after death — to make sure you don’t go over the exemption limit.



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