The
first $14,000 of gifts ($28,000 for married couples who split gifts) made by a
donor to each donee in calendar year 2014 is excluded from the amount of the
donor's taxable gifts. (The exclusion remains at $14,000 for calendar year
2015.) These exclusions can save both transfer tax for the donor and family
income taxes. A gift that qualifies for the exclusion is free of gift tax.
Estate tax can be saved because both the value of the gift on the date of
transfer and post-transfer appreciation (if any) in the value of the gift won't
be included in the donor's estate. Family income tax savings can be realized
where income-earning property is given to family members in lower income tax
brackets.
Planners
should remind individual clients that they have to act no later than Dec. 31 to
take complete advantage of their 2014 annual exclusions. Unused annual
exclusions can't be carried over and are forever lost.
A gift
to a noncharitable donee that is made by check is complete on the earlier of:
... the
date on which the donor has so parted with “dominion and control” under local
law as to leave in the donor no power to change its disposition, or
... the
date on which the donee deposits the check (or cashes the check against
available funds of the donee) or presents the check for payment, if it is
established that:
(1) the
check was paid by the drawee bank when first presented to the drawee bank for
payment;
(2) the
donor was alive when the check was paid by the drawee bank;
(3) the
donor intended to make a gift;
(4)
delivery of the check by the donor was unconditional; and
(5) the
check was deposited, cashed, or presented in the calendar year for which
completed gift treatment is sought and within a reasonable time of issuance.
AB Tax Accounting Recommendation: If
a gift is made by check near the end of 2014 and the donor wants to take
advantage of the exclusion this year, the donee should be urged to deposit the
check before year-end, so that there's no doubt as to when the gift was made
These
are just some of the year-end steps that can be taken to save taxes. Again, by
contacting us, we can tailor a particular plan that will work best for you. We
also will need to stay in close touch in the event Congress revives expired tax
breaks, to assure that you don't miss out on any resuscitated tax saving
opportunities.
We're
here to help! For no obligation free consultation contact us today!
(651) 621-5777, (952) 583-9108, (612) 224-2476, (763)
269-5396
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