2014 Annual Exclusion Gifts In 2014, every person is allowed to give any individual up to $14,000 a year (same in 2013) in gifts (indexed for inflation). This is called your Annual Exclusion. In 2014 you can give $14,000 to one hundred different people each year and have all the gifts covered under this exclusion. You are not allowed to carry over an annual exclusion from one year to the next. Example: You and your spouse cannot give your sister $28,000 this year and claim a full annual exclusion because you did not give your sister anything last year. IMPORTANT NOTE: Gifts that qualify for the annual exclusion must be present interest gifts versus gifts of a future interest. This means the recipient must be able to use the assets immediately, versus restricting their present use, for example, by putting the assets in a trust for future transfer. However, there are methods of qualifying gifts in trust for the annual exclusion, e.g., a section 2503(b) trust established for a minor and adding trust provisions that give beneficiaries certain withdrawal rights. Ask your estate planning professional for a more detailed explanation of these methods.
Posted on: Sun, 02 Nov 2014 16:00:00 +0000
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