Do you want to give your children or grandchildren some gifts each year to reduce your estate, help them with a house or educational expenses but
don't want to pay taxes?

The 2023 annual gift tax exclusion is $17,000.00 per person, so you can give that amount to each of your children, as long as the gift is completed before January 1, 2024.

However, as of January 1, 2024, that limit goes up to $18,000 per person. 

But wait.  There's more!

If you're married you can give even more - see below.

A husband and wife can therefore gift $36,000.00 per child and, if they wish, to each grandchild (or even to remote relatives or unrelated people).  This gift is not income tax deductible to you but is also not taxable for income tax purposes to the recipient.  And, if you're paying tuition bills directly you can give even more - see below.

If you're going to give the $18,000.00 per person and pay for tuition, you must pay the school directly.

Whether your gift is to a child or grandchild, if your gift is at or below this $18,000.00 amount, no gift tax return is required.

For gifts above that amount, a gift tax return may be required but each person (as of January 1, 2024) also has a lifetime exemption of $13,610,000 before they must begin to pay gift or estate tax. 

You can also make gifts to people other than family members too.

And, to make matters more complicated, you can also use your non renewable federal estate tax exemption of up to $13,610,000 per individual donor.  In short, if you want to help a child to buy a house, form a business, or do anything else, you and your attorney should be able to find a perfect strategy.

For more detailed information, click here to read this article on gifting and end of year review of your estate plan.

For more personalized information on gifting to children and grandchildren see our videos on this page or if you live in Pennsylvania call 610-933-8069 for a telephone consultation on gifting.


David M. Frees, III
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Attorney, Speaker and Author