Q:

Subject: Gift Question

 

Hi,

I found your website while looking for an answer.... I understand the single gift limit of $11k per person. However. Is there a annual limit of gifts. In other words... How many $11k (or $12k etc. depending on the year) gifts can I give? As long as each gift is to a different person is there a limited number?

 

Thanks

A:

You really should be working with your own personal professional tax advisor on matters such as this because you are misunderstanding the rules.

As you can see on my website, the annual allowance of $12,000 (as of 1/1/06) is not per gift.  It is total per recipient per calendar year.

There is no maximum number of people to whom you can make gifts.  The gifts do have to be bona fide to the original recipients without conditions.  For example, you can't give 100 people each $12,000 with the requirement that they pass that money on to another person in order to avoid the per person limit.

Gifts totaling more than the annual allowance won't automatically cost you any actual gift tax.  You will have to report them to IRS on a Gift Tax Return (Form 709), but they can be offset against your one million dollar lifetime exclusion.

Again, any competent professional tax advisor should be able to help you set up an appropriate gifting strategy for your particular circumstances.

Good luck.

Kerry Kerstetter

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 2/11/2006 03:22:00 PM Send this post: