Gift Tax Questions
Are Gifts Tax Deductible?
Gifts may only be deducted if the recipient is a public charity, church or other organization authorized by the Internal Revenue Service to receive tax-deductible contributions.
Contributions to individuals, or to organizations that do not meet this criteria, are not deductible. Neither are contributions to political candidates or organizations.
Gifts to individuals may be subject to Gift Taxes (having nothing to do with Income Taxes). Generally, any gifts in excess of $13,000 per individual in a calendar year could be subject to Gift Taxes.
What Is A Gift Tax?
A Gift Tax return is required (having nothing to do with income tax) if you give a "taxable" gift, that is, a gift subject to gift tax reporting. Generally, any gifts in excess of $13,000 per person in a calendar year would be considered taxable gifts. A married couple may elect to split a gift, on Form 709 or 709-EZ, which allows them to give a combined total of $26,000 in one year to an individual without any part of it becoming taxable.
Gifts may only be deducted if the recipient is a public charity, church or other organization authorized by the Internal Revenue Service to receive tax-deductible contributions.
Contributions to individuals, or to organizations that do not meet this criteria, are not deductible. Neither are contributions to political candidates or organizations.
Gifts to individuals may be subject to Gift Taxes (having nothing to do with Income Taxes). Generally, any gifts in excess of $13,000 per individual in a calendar year could be subject to Gift Taxes.
What Is A Gift Tax?
A Gift Tax return is required (having nothing to do with income tax) if you give a "taxable" gift, that is, a gift subject to gift tax reporting. Generally, any gifts in excess of $13,000 per person in a calendar year would be considered taxable gifts. A married couple may elect to split a gift, on Form 709 or 709-EZ, which allows them to give a combined total of $26,000 in one year to an individual without any part of it becoming taxable.
The term "taxable gift" is also a bit misleading, since, in most cases, you do NOT owe a tax with the gift tax return. You are allowed one lifetime unified credit against estate and gift taxes, which allows you to pass property worth $1,000,000 with a unified credit of $345,800 to heirs or others without incurring an actual tax. Each "taxable" gift you give during your lifetime reduces that allowance, dollar for dollar. When the entire $1,000,000 with a unified credit of $345,800 is used up, during your lifetime or when passing property to your heirs when you die, a gift tax or an estate tax, depending on the situation, is due on the excess.
posted by kernblog @ 18:44
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