Whether your gift is to a child or grandchild, if your gift is at or below this amount, no return is required.
For gifts above that amount, a gift tax return may be required but each person also has a $5,000,000.00 million dollar lifetime exemption (during 2011 and 2012) before they must begin to pay tax.
There is also a provision that allows you to pay more for a child or grandchild's college education but
only if the payment is made directly to the college or educational institution.
Between the $5 million exemption (per donor) and the $13,000 annual exclusion, per recipient, it is possible for a married couple to move huge sums through gifting during 2011 and 2012.
Becareful, however to get advice about filing a gift tax return, and the best startegy for optimizing transfers to children or grandchildren.
David Frees, JD is Chairman of the Trust, Estate and Wealth Preservation Section of
Unruh, Turner, Burke and Frees.
For questions of more information about transfering wealth through gifting, trusts, and wills, call 610-933-8069
to reach Mr. Frees