Gifting
We want to give our children an amount above the yearly gift exemption. We know we will have to file a 709 form with the IRS and it will count against the lifetime federal gift exclusion, which is of no concern. But will it also count against the Illinois 4 million lifetime exclusion?
Terry Says
Illinois does not have a gift tax — but it does have a (current) $4 million estate tax exemption. So down the road, if your estate is over that limit, estate taxes would apply. Illinois follow the annual rules for Federal gifting, and if you gift over that amount, you might want to keep a record of it– though practically speaking unless it is a huge gift, it likely won’t impact your Illinois estate tax exclusion at death.
I hope you are getting good advice on these gifts. Paying certain expenses (education) directly avoids the annual gift tax limitation. And you might be better off spreading out those amounts to keep them under the current $19,000 Federal gift exemption annually.
