Gift Tax Question

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  • January 17, 2013 at 1:53 am #175717
    mdrobbin
    Member

    Are gifts double taxed to the donor if the donor gives a gift subject to gift tax? For instance, if I give my brother a gift of $15,000 (over the $13K exclusion)… I already paid taxes on that income. Am I paying an additional tax on top of my income tax for the $2K over the $13K exclusion?

    Hope that’s not a dumb question… brain is fried from studying

    FAR - 2012 - PASSED (YAEGER)
    AUD - 2012 - PASSED (YAEGER + NINJA NOTES)
    BEC - 2012 - PASSED (YAEGER + NINJA NOTES)
    REG - 2013 - PASSED (YAEGER + NINJA NOTES + NINJA AUDIO)

    ETHICS - 2013 - PASSED

    DONE!!! Thank you A71 for all the support! Hiya!!!

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  • January 17, 2013 at 2:11 am #412568
    Anonymous
    Inactive

    You would pay a gift tax now on the $2,000 if you plan on having a very wealthy estate. The exclusion for estate tax in a lifetime is $5 million and people who expect to have an estate greater than that might pay gift taxes so it doesn't build up when they die and leave the wealthy estate with a large tax liability.

    January 17, 2013 at 2:17 am #412569
    Noct
    Participant

    Yes, the giver is double taxed, but understand that gift tax is effectively a prepayment of estate tax, and it is subject to the same exclusion of $5 million per benefactor (cumulatively over their lifetime), so in your example, the giver would pay no gift tax. The $13k you are referring to is the amount that can be gifted each year without including it in the $5 million exclusion.

    FAR - 79 - 07/2012
    AUD - 65, 78 - 11/2012
    BEC - 76 - 11/2012
    REG - 78 - 01/2013
    ETH - 98 - 01/2013

    Material: Wiley books

    January 17, 2013 at 3:03 am #412570
    mdrobbin
    Member

    Thanks for the clarification!

    FAR - 2012 - PASSED (YAEGER)
    AUD - 2012 - PASSED (YAEGER + NINJA NOTES)
    BEC - 2012 - PASSED (YAEGER + NINJA NOTES)
    REG - 2013 - PASSED (YAEGER + NINJA NOTES + NINJA AUDIO)

    ETHICS - 2013 - PASSED

    DONE!!! Thank you A71 for all the support! Hiya!!!

    May 16, 2013 at 5:33 pm #412571
    mrspanda11
    Member

    Hi, is the exclusion of $5MM the same for 2013? Taking the test at the end of May. thanks!

    May 17, 2013 at 10:57 pm #412572
    TPratt
    Member

    The annual exclusion for 2013 is $14,000 per donee per donor, and the lifetime exclusion has increased to $5,250,000.

    REG - 87
    BEC - 81
    AUD - 80
    FAR - 81 AND DONE!!

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