After staying the same for five years, the amount you can give away to any one individual in a year without reporting the gift has increased for 2018.
The annual gift tax exclusion for 2018 is $15,000. This means that any person who gives away $15,000 or less to any one individual does not have to report the gift or gifts to the IRS.
Most think that if you give away more than $15,000, that you’ll have to pay taxes. WRONG!! You will only have to report the gift to the IRS. But no tax will be due, if you haven’t given away more than allowed over your lifetime.
The IRS allows individuals to give away a total of $11.2 million and couples $22.4 million during their lifetimes before a gift tax is owed. This exclusion means that even if you must file a gift tax return (Form 709) because you gave away more than $15,000 to any one person in a particular year, you will owe taxes only if you have given away more than $11.2 million (for an individual) or $22.4 million (for a couple) in the past.
I have been doing Estate Planning and Elder Care Legal Planning since 2006. Although I have represented people with lots of money, none of them had given away tens of millions of dollars. As a result, I must conclude that the filing of a gift tax return is merely a formality for nearly everyone.
Contact our office if you have any question about the new tax law.