Gift Tax
Gift tax law firm E. Steven Lauer, P.A. of Vero Beach answers common questions concerning gift tax law.
What is the gift tax? The gift tax is a penalty imposed by the federal government and some states (not Florida) on property transferred to another without recompense during the giver's lifetime. The tax is generally paid by the donor, based on fair market value, and has an exclusion amount per individual donor that is determined by the IRS. For 2009, that amount is $13,000.
How does it affect married couples? When property is jointly owned by a married couple, each spouse is entitled to the annual exclusion. For example, a couple with two married children could gift $26,000 to each child and spouse, for a total of $104,000.
Why are some gifts taxable while others are not? While in theory all gifts are taxable, there are some exceptions. Generally the following are not taxable:
- Gifts that are valued below the annual calendar year exclusion
- Educational and medical expenses paid for another person
- Gifts to a client's spouse
- Gifts to a political organization
Do I need an attorney to make a gift to someone? Perhaps not if it is a simple transaction of limited value. But if considering making a substantial gift to someone, clients should definitely consult a gift tax attorney beforehand. Experienced transfer tax lawyers such as Steven Lauer (who is certified in Taxation by the Florida Bar) can not only recommend tax and estate planning in Vero Beach strategies to minimize the gift tax, but can also help ensure that transfers are handled according to IRS guidelines.
