2006-09-27 07:56:09 · 10 answers · asked by colleen s 1 in Business & Finance ➔ Taxes ➔ United States
Estate and Gift Tax
Generally, an estate tax return must be filed if the estate is more than the unified credit effective exclusion amount. This amount increases to $2,000,000 (from $1,500,000) for estates for tax-year 2006 through 2008, and increases to $3,500,000 for tax-year 2009. The amount remains $1,000,000 for gifts for tax-year 2006.
The estate and gift maximum marginal tax rates drop to 46% (from 47%). The rates drop to 45% by tax-year 2007.
The annual gift tax exclusion increases to $12,000 (from $11,000).
In 2010, the estate tax is repealed, as is the "stepped up" basis rule for inherited property.
2006-09-27 08:32:49 · answer #1 · answered by littlebettycrocker 4 · 2⤊ 0⤋
I CANNOT believe the number of people on here that are listing themselves as tax professionals and saying that the annual exclusion is $10,000 or $11,000!!! - I'm assuming you do NO tax planning, only the most basic 1040s. The two or three that listed $12,00 for 2006 were correct. LTCPA had a great example but I will disagree with him on one thing (although he has been practicing a couple years longer than I have :-)).
If your estate is worth less than $1 million now - does it somehow mean it always will be??? If you gift over $12,000 this year and do not file the gift tax return and track how much of your lifetime unified credit that you use and through some good fortune become a millionaire and and get into an estate level that warrants knowing what you have and have not used of your lifetime unified credit - Then what?? - If you gift over $12,000 per individual in 2006 I would recommend to my clients to file the 709 and track your using of the unifed credit. - I'm hoping that someday it matters for you! :-) (Or maybe I'm just more risk-averse than LTCPA)
If you see some of the other answers I posted regarding gifting you will see that I am not altogether uninformed in estate and gift planning. :-)
2006-09-28 04:58:09 · answer #2 · answered by FlCpa 3 · 0⤊ 0⤋
Wow people, it was $10,000 quite a while ago!
The answer is $12,000 for 2006. And remember, if you are married both you and your spouse get to gift $12,000 each. That could mean $24,000 in gifts - tax free!
And to disagree with the first person who answered, it is an ANNUAL exclusion for each donee.
Keep in mind there are some exceptions if you are gifting beyond the simple things (like cash). You'll want to consult a CPA or tax attorney in that case.
2006-09-27 08:11:19 · answer #3 · answered by Molly 6 · 3⤊ 0⤋
You people are all idiots (except Molly & April H). The amount for 2006 is $12,000 per donee. The $12,000 can be given each year for as long as you live. If you gift in excess of $12,000 you are supposed to file a Form 709 Gift Tax Return. Each person is allowed to gift up to $1,000,000 in their lifetime (this is in addition to their annual $12,000 exclusion).
Example: I gift my son $15,000 in 2006. By April 15, 2007 I am supposed to file a Form 709. I would report my $15,000 gift. The first $12,000 would count as my annual exclusion, the extra $3,000 would be deducted from my $1,000,000 lifetime exclusion leaving $997,000.
You notice I used the term "supposed to file Form 709". This is because if your estate (the value of everything you own) is no place near $1,000,000 then the IRS really doesn't care if you give more than $12,000 per year.
The information provided by April H was good except she got over into Estate Tax and your question was about Gift Tax.
The bottom line is this: If your Estate (the value of everything you own) is less than $1,000,000 then give what you want and don't worry about it.......if your Estate is between $1,000,000 and $2,000,000 then you probably don't need to worry about it , but you should contact a CPA knowledgeable in estate and gift taxation. If your estate is larger than $2,000,000 then you really need to seek the services of an good CPA and Estate Planning Attorney.
I am a practicing CPA since 1975. I hope this helps.
2006-09-27 12:41:48 · answer #4 · answered by LTCPA 2 · 1⤊ 1⤋
$12,500 each. If you are married you and your spouse can decide on joint gifting and it becomes $25,000.00 each, without having to file a gift tax return.
if you don't mind filing the return there is no limit-however, your lifetime exemption (Estate, gifts, etc) will be reduced by the tax.
(You won't actually have a tax bill to pay in most instances)
2006-09-28 03:35:42 · answer #5 · answered by besttaxexpert 2 · 0⤊ 1⤋
Look it up...IRS.com
I think you can make a one life time gift of 10,000 to a family member..but I don't think you can do it each year.. Just once!
2006-09-27 07:58:45 · answer #6 · answered by Anonymous · 0⤊ 5⤋
Just make sure you arn't giving them anything that will incur capital gains.
2006-09-27 08:04:10 · answer #7 · answered by joe 2 · 0⤊ 3⤋
$11,000 per parent to each child.
2006-09-27 09:15:35 · answer #8 · answered by Anonymous · 0⤊ 2⤋
$10,000 per person, $20,000 per couple (if married).
2006-09-27 09:37:42 · answer #9 · answered by Dee 4 · 0⤊ 1⤋
$10,000/year/member
2006-09-27 08:00:48 · answer #10 · answered by Anonymous · 0⤊ 3⤋