Reply to exceeding $19,000 gift limit

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Reply to "exceeding $19,000 gift limit "

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[quote=Anonymous][quote=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...[/quote]

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.[/quote]

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