Health
Gifts That Matter to the IRS
The friendly folks at IRS have become more aggressive when it comes to auditing gift and estate taxes -- so don't give them the chance to pry into your books.
If you've decided to start parceling out your estate to your heirs now, rather than having your executor do it later, keep the tax consequences in mind -- and maintain good records, says Money.com tax expert Teresa Tritch.
You can give any one person up to $10,000 a year in cash, securities or any other assets without incurring the federal gift tax. When you give more than $10,000, however, the overage is subtracted from the amount you can leave free of estate taxes when you die -- $675,000. So if you give a child $15,000 this year, the estate you can leave tax-free would be reduced to $660,000.
Even if your gift doesn't exceed $10,000, you might consider filing a gift-tax return, since the IRS would then have only three years to dispute the value -- whereas there's no limit on the time it can audit a gift for which no return was filed.
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For today's top stories, visit the ThirdAge100.
If you've decided to start parceling out your estate to your heirs now, rather than having your executor do it later, keep the tax consequences in mind -- and maintain good records, says Money.com tax expert Teresa Tritch.
You can give any one person up to $10,000 a year in cash, securities or any other assets without incurring the federal gift tax. When you give more than $10,000, however, the overage is subtracted from the amount you can leave free of estate taxes when you die -- $675,000. So if you give a child $15,000 this year, the estate you can leave tax-free would be reduced to $660,000.
Even if your gift doesn't exceed $10,000, you might consider filing a gift-tax return, since the IRS would then have only three years to dispute the value -- whereas there's no limit on the time it can audit a gift for which no return was filed.
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For today's top stories, visit the ThirdAge100.
