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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 556
Experience:  MTax, EA, QuickBooks Proadvisor. Over 15 years accounting and tax experience specializing in individual and small business.
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With gift tax, a person can give another 13000. If it exceeds

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With gift tax, a person can give another 13000. If it exceeds that amount in a year's time, do you pay tax on the balance, or do you have up to the 5 million dollar lifetime before you pay any gift tax

Stephanie B. :

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You are correct that a person can currently give $13,000 to a person without this being a “taxable gift” for gift tax. I say currently because the annual gift tax exclusion amount can change with inflation. This $13,000 is an annual gift tax exclusion amount so each year you could give $13,000 to a person and turn around and give them another $13,000 the next year without having to file a gift tax return.

If you gift a person over the $13,000 in a year, you need to file a gift tax return to show the “taxable gift”. The “taxable gift” then reduces your lifetime exclusion which is currently $5 million dollars. Once you exceed the $5 million, you start paying the gift tax on “taxable gifts” given after that point.


 


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I appreciate the opportunity to assist you and I look forward to your response.

Stephanie

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