CHAPTER 39Gift and Estate Tax Planning Basics
Gift planning can be an important part of estate planning. This chapter provides an overview of the federal gift tax and estate tax, which is separate and apart from income tax. Developing an estate plan for your assets requires professional assistance, but the basic guidelines in this chapter can help you begin to estimate your potential estate and start thinking about property transfers that may reduce or avoid the estate tax.
Relatively small gifts can completely avoid gift tax (39.2) because of the annual gift tax exclusion, which for 2022 is $16,000 per donee. Gifts to a spouse and certain gifts to pay educational or medical expenses also are not subject to the gift tax.
Gift tax (39.4) generally does not have to be paid even on very substantial taxable gifts because the tax is offset by a tax credit that for 2022 effectively exempts up to $12.06 million of taxable gifts from the tax.
The credit for gift and estate taxes is unified, so the same exemption of $12.06 million applies to the estates of those dying in 2022, to the ...
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