Dear Liz: I am a widow age 95. I would like to give my three kids, who are in their 60s, $5,000 each this year. What are the taxes, and who pays them?
Answer: Gifts aren’t taxable to the recipients, and the only givers who have to pay taxes are those who have given away millions of dollars during their lifetimes.
Let’s start with the basics. You only have to file a gift tax return, which notifies the IRS of your generosity, when you give someone more than the annual exemption limit, which is $18,000 in 2024. So you could give your kids $54,000 before the end of the year and not have to tell the IRS.
You wouldn’t actually owe taxes on your gifts until the amounts you give away above that annual limit exceed your lifetime gift and estate limit, which is currently $13.61 million.
A taxable gift is typically deducted from the amount that avoids estate taxes at your death. But if you have enough money to worry about that, you should have an estate planning attorney who can advise you about how to proceed.
Thank you so much, a perfect answer, simply put!
You are a treasure!
Hi Liz,
With the new administration, please give us your opinion on what’s going to happen with Social Security. For those not yet who have applied for Social Security, is it is your opinion that its better to file now or wait?
I think a lot of people may be interested in your thoughts. Thanks.
You should mention that the current exemption level is going to sunset soon