Gift Giving

The IRS defines a gift as “any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.” Therefore, you have made a gift when you give property, or the use of property, including money, without expecting to receive something of equal value in return. If you sell something at significantly less than its value or make an interest-free (or reduced-interest) loan to someone, you may also be making a gift.

The donor is generally responsible for paying any tax that is owed on a gift.

While the general rule is that any gift is a taxable gift, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts:

• Gifts that are not more than the annual exclusion for the calendar year.**

• Tuition or medical expenses you pay directly to the institution for someone (the educational and medical exclusions).

• Gifts to your spouse.

• Gifts to a political organization for its use.

In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made (see the charitable contribution page).

Now that the lifetime gift tax exclusion has risen to $11,180,000, there are a great deal of gift giving and estate planning that can be done. We have many strategies to assist in making the most of this exclusion. The tax laws surrounding gift (and estate) taxes are very complicated and tend to change quite often. Please contact us via email or call 404-892-7967 if you’d like to discuss your personal situation in greater detail.

** For 2018, the annual gift exclusion per donee is $15,000. If you are married, then both you AND your spouse are each entitled to the full exclusion per giftee. This means that together you can give each donee $30,000 and it is not required to be reported. This gift is not deductible to you, however, it is also not required to be reported as income by the donee.