Before we explain the annual gift tax exclusion, we should provide a bit of background information. The estate tax was established in 1916. At first, there was no gift tax. As a result, high net worth individuals gave gifts while they were living to avoid the estate tax. The tax man took notice, and a gift tax was enacted. It was briefly repealed, but it returned for good a couple of years later. These days, the gift tax is unified with the estate tax. Annual Gift Tax Exclusion Gifts that you give to others are potentially taxable at a maximum rate of 40 percent. However, most people never pay the gift tax because there are exclusions. One of these exclusions is the annual gift tax exclusion. You can use this exclusion to give tax-free gifts to others each year. The amount of the exclusion is $14,000 at the present time. Each taxpayer may give as much as $14,000 to any number of gift recipients each year free of the gift tax. There is no limit to the amount that you can give tax-free
Posted on: Thu, 17 Jul 2014 08:40:14 +0000
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