In 2017, the annual gift tax exclusion remains at $14,000. This means that each year, you can give $14,000 in cash, stocks and bonds, or an interest in physical property without triggering any gift tax. This $14,000 figure is indexed to inflation and therefore tends to rise modestly over time (e.g. back in 2000, you were permitted transfer $10,000 of present value without triggering a gift tax). The top rate thereafter is 40%. Also, the annual gift tax exclusion allows for separate gifts from two parents. In other words, a child may receive $14,000 from mom and $14,000 from dad for a total value of $28,000 each year without any required tax obligation.
You might wonder: What happens if a family is trying to build up an irrevocable trust fund for their three kids in a tax efficient manner? Should they give their kids $28,000 each, or is there a … Read the rest of this article!