You can give away as much as $13,000 during the year to anyone you want—and to each of as many people as you choose—without any tax considerations. These gifts can be to family members, friends or even complete strangers.
Gifts are thought to be simple. However, if you are serious about making savvy wealth transfers to loved ones, then the annual gift tax exclusion is an important tool.
For some welcome straight answers on gifts and gift taxes, The Wall Street Journal recently examined the “Basics of the Gift-Tax Exclusion.”
While the original article doesn’t offer exhaustive advice, it provides practical pointers you can use. After all, anything related to tax planning can have hidden complexities.
Once you conquer the basics and have a long-range plan in play, a gifting program can be one of the most powerful, reliable, and comparatively simple wealth transfer strategies.
Reference: The Wall Street Journal (August 4, 2012) “Basics of the Gift-Tax Exclusion.”