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THE ANNUAL GIFT TAX EXCLUSION THE
ANNUAL GIFT TAX EXCLUSION - The annual gift tax exclusion is $11,000 per person
(the person receiving the gift is known as a donee) by the person making the
gift (known as the donor). Example:
A husband and wife with 5 children may each give an annual gift of $11,000 to
each child; i.e., the father can make a gift of $11,000 each to 5 children or
$55,000 and the mother $11,000 each to the same 5 children or $55,000 for the
annual total of $100,000. This
annual gift exclusion will not in any way diminish the amount of the lifetime
federal estate tax exclusion that may be applicable at the time of death.
As an example, during the years 2000 to 2001 the lifetime exclusion is
$675,000. If prior to death of the
husband and wife, they made the gift above described of $100,000 to their five
children, it would not reduce the lifetime exclusion of $675,000 to $575,000; it
would remain at $675,000 for the years 2000 and 2001. The
annual gift tax exclusion does not require the gift to be to children or
grandchildren. It can be made to
any person or entity. If the gift
is $11,000 or less, a gift tax return does not have to be filed. Those
persons with sufficient wealth may use this method to greatly reduce the impact
of federal estate taxes upon their death beyond the lifetime exclusion and the
unlimited marital deduction. For more specific and any current changes not yet posted here, please contact us. Ó 2003 James
W. Pearson, Jr. , All Rights
Reserved FOR
ADDITIONAL INFORMATION CALL THE TOLL FREE HELP LINE 1-800- 232-1477 E-mail: lawyer@lawwalk.com JAMES
W. PEARSON, JR. Chair of the Federal & State Credit Union Department & Coordinator of legal consultations under the Family Legal Care Plans offered to credit union members. |
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