exceeding $19,000 gift limit

[Anonymous]

People make a big deal about not exceeding the $19,000 per person annual gift ceiling, but how onerous is it really to file a tax form for annual gifts above the $19,000 limit? As far as I understand it, you're not actually paying any tax itself until you exceed the lifetime maximum of almost $14M.

[Anonymous]

It was no big deal

[Anonymous]

You are correct Op, and honestly, just pay for stuff directly for the person.

[Anonymous]

Depends on your definition of "big deal." I had to pay an extra $1000 for my accountant to prepare the gift tax return when I gave me kid $150,000 for a down payment. I didn't expect that and it surprised and annoyed me. Apparently the return is a little complicated.

[Anonymous]

I asked about this and there is a whole thread on it here. I find the law makes little sense. Why even say there is an annual limit and force people to fill out a form or pay someone else to fill out a form??

For overages, I'll likely pay for something medical, which is allowable. Then, I don't have to worry about the form...

[Anonymous]

Anonymous wrote:I asked about this and there is a whole thread on it here. I find the law makes little sense. Why even say there is an annual limit and force people to fill out a form or pay someone else to fill out a form??

For overages, I'll likely pay for something medical, which is allowable. Then, I don't have to worry about the form...

The $14m exemption from the estate tax also applies to the gift tax. The point of that is to keep people from avoiding the estate tax by giving away assets while they are alive. The reason for the form is so the IRS can keep track of how much of the $14m exemption that you’ve used.

In practice, the IRS will never know if you exceed the $19k per year by relatively small amounts more than 5 years or so before your death. When they do an estate tax audit, they’ll go back through records for a few years before you die and see if you have given away excess money. But if you give your kids $150k when you are 60 and don’t report it and then die at 90, the IRS will never know.

[Anonymous]

Anonymous wrote:People make a big deal about not exceeding the $19,000 per person annual gift ceiling, but how onerous is it really to file a tax form for annual gifts above the $19,000 limit? As far as I understand it, you're not actually paying any tax itself until you exceed the lifetime maximum of almost $14M.

I am the OP of the other post about gift taxes and I am concerned about exceeding the lifetime maximum amount. Please don't flame me for this. We will also be gifting substantially to charities. I know that we will need to consult an estate tax attorney and I realize now it was a mistake to start the thread that I started.

[Anonymous]

One consideration is whether your state of residence has a lower gift tax threshold than the federal government.