December 29, 2016

Understanding Gift-Tax Exclusions

What are gift-tax exclusions? According to the IRS, a gift must be given with no expectation of receiving anything of equal value in return. Gifts can be cash, property, interest-free loans, payments made to a third party (like a school or hospital) on behalf of the recipient, below-market rate sales, and other types of property transfers. Generally, gifts that meet the following requirements are not taxable: Gifts that are less than the annual exclusion amount for the year ($14,000 in 2016 and 2017) Tuition or medical expenses Gifts to your spouse Gifts to qualified charities and certain political organizations For more information about gifting and end-of-year tax issues, please contact a qualified tax professional. Tip courtesy of IRS.gov