What are the annual limits on gifts for and between individuals?
Thanks a bunch.
Terry Says: Currently — for 2014 and 2015, you can give up to $14,000 to anyone — relative or not — and reduce your estate by that amount without filing a gift tax return. But actually, you can give any amount away at any time to anyone. The recipient doesn’t have to declare it in any way, and you don’t get a tax deduction — unless it’s to a recognized charity. It’s just that gifts over the amount just noted will be part of your combined estate and gift tax liability, which will come into play if you die with an estate over $5.34 million (currently).
Oh, and you can give an unlimited amount to your spouse — either during your lifetime or at your death without any estate taxes. It’s just that if you gift a huge amount to your spouse, your lifetime $5m exemption will be “wasted” and when your spouse dies the entire estate will be taxed. Don’t you wish you had that kind of problem?!