What are the gifting limits 2014?

file0001508044668QUESTION: I want to give some money to my daughter to help her out right now. How can I do that and make sure there are no tax issues?

ANSWER: There are gifting limits. As long as you stay within those limits every body is fine.

DISCLAIMER: Carl Ostenson is not a tax advisor. This post is for educational purposes only. Please consult with your CPA or tax adviser before doing anything.

So what are the gifting limits 2014?

So let’s dive into this one.

In 2014 the gifting limit is $14,000.

So let’s look at an example:

Let’s say you and your wife want to give some money to your daughter.

You can both gift her $14,000 this year for a total of $28,000.

The $28,000 is income tax free to your daughter.

The $28,000 reduces your taxable estate by $28,000.

LET’S GET CREATIVE

Let’s say your daughter has 2 children.

You could each gift each child $14,000. So each child could get $28,000

2 kids equals a total of $56,000

Plus the $28,000 you gave your daughter

The total could be $84,000 that could be gifted to your daughter’s family without any tax issues.

Then you could do it again in 2015.

So you can get creative in how you do this and gift away a substantial amount of money.

  • It goes income tax free to the recipient.
  • It reduces your taxable estate.

For more information about the gifting limits is 2014 here are a few resources.

IRA page: Frequently Asked Questions on Gift Taxes: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes

IRS page on tax benefit increases due to inflation: http://www.irs.gov/uac/Newsroom/In-2014,-Various-Tax-Benefits-Increase-Due-to-Inflation-Adjustments

Here’s a Kiplinger article on ways to give money to your children: http://www.kiplinger.com/article/saving/T065-C000-S001-ways-to-give-money-to-children.html

 

 

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