Money Monday!

The $64,000 question?  U.S. tax law states that an individual can give a gift of a certain amount to another individual each year without having to file a gift tax return form 709. Last year, that number was $15,000. For 2022, it has grown to $16,000.  For example:

• A Mother could give an adult son $16,000 each year without triggering federal taxes.

Below is an approach to take greater advantage of this:

• Mother gives $16,000 to son. Father gives him $16,000 as well.
• Mother gives $16,000 to daughter-in-law. Father gives her $16,000 as well.

$64,000 has now been transferred from one married couple to another without tax consequence.

So, that’s the answer to your “$64,000 question” in case you were wondering about the tax consequences of giving money to family.

The federal estate tax exemption in 2022 is $12.06 million per individual or $24.12 million per married couple.  Chances are, gift taxes will not apply to you.  If this does, good for you! 

This amount was $1 million as recently as 2003, so it’s worth doing careful planning as policies are always subject to change.

It’s a good idea to use a professional for tax or legal advice, and I’d be happy to refer you to one.

 

 

Source: Internal Revenue Service, taxfoundation.org, investopedia.com

 

 

 

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