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February 8, 2019 by Michelle Morris

Gift Taxes – the short and long of it.

The gift tax short version:

You can give up to $15,000 per year of cash or property (in 2019) to as many people as you wish without filing a gift tax return. The gift is not taxable to the recipient.


Now the gift tax long version:

1. Gift tax, if due, is generally paid by the DONOR, not the recipient.

2. There is an annual gift exclusion in 2019 of $15,000. You can give $15,000/year to as many people as you want without having to file a gift tax return.

  • This amount is adjusted each year for inflation

3. Under current law you can give away $11,400,000 during life and at death without owing any gift or estate taxes.

  • Yes, that is over 11 million dollars
  • Think of this as an >$11 million dollar giveaway “coupon”
  • If you are married the total is >$22 million

4. The purpose of the gift tax return is to track how much you are giving away during life.

  • For example, if you give someone $50,000 then you file a gift tax return and the $50,000 is subtracted from your $11+ million dollar lifetime giveaway coupon
  • No tax due!
  • If at some point your lifetime gifts exceed $11 million only then would there be gift tax due
  • Of course the law could change in the future

5. A married couple can give $15,000/year each to as many people as they wish.

  • But may need to file a gift tax return to declare they are splitting the gift.

6. If you give someone more than $15,000 in a year (or $30,000 for a married couple), then you need to file a gift tax return.

7. Payments made directly to an educational or medical institution for someone else are exempt from gift taxes; no gift tax return is required.

  • However, making direct payments to a college may affect the student’s financial aid

8. Gifts to a spouse are exempt from gift taxes as long as the spouse is a US citizen.

9. Gifts to a political organization are exempt from gift taxes.

Topics: Filed Under: Taxes

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From the Blog

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Important Legal Information

Investment advisory products and services are offered through advisory representatives of BRIO Financial Planning, an investment advisor registered with the Commonwealth of Massachusetts.

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Contact Us

Michelle Morris, CFP® EA
BRIO Financial Planning
1073 Hancock St. #101
Quincy, MA 02169

michelle@briofp.com
617-934-0419 (phone)
617-934-1933 (fax)

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