If you are interested in gifting stocks, bonds, money, real estate, business interests or other assets to one or more children or grandchildren then you are on the right page. 

The rules about "gifting" to others change just about every year, so to stay current, check with your tax advisors and/or your estate planning lawyer.

To get you started, here is a summary of the new information.  However, gifting can be more complicated than you might think.  

For example, there are different rules for gift taxes than there are for the nursing home rules under Medicaid.  So use the information here as only a guide and get good information from an estate and gift tax advisor based on your personal and specific information.

Gifting in 2024:

The new 2024 annual gift tax exclusion inflation adjusted to $18,000.00 per person. This amount can be given to a child, grandchild and/or their spouses (as well as others).

Furthermore, if you are married, each spouse can gift this amount to each desired recipient for a total of $36,000 without necessarily having to file a 709 gift tax return.

If one spouse has greater assets, be sure to ask your adviser about "split gifts" and whether or not you need to (or should) file a 709 gift tax return.

For example, cash can be gifted up to that limit without a gift tax return.  But, if you're gifting "hard to value assets" such as real estate, business interests, or art, you may want to file a gift tax return to force the government to accept or to challenge your method of valuing those gifts.

Lifetime Exclusion (unified credit): In addition to the annual gift tax exclusion, each person as of 2024 also has a $13,610,000 lifetime credit (up from $12,920,000 in 2023) which can be used to make gifts to children and grandchildren and/or their spouses.

You will be required to file a 709 gift tax return when making gifts larger than the $18,000.00 per year annual gift tax amount but you can use your lifetime credit to make such gifts without paying tax.

NOTE:  Gifts of hard to value assets such as real estate or business interests may also require not only a gift tax return but an appraisal or other prrofessional opinions as to value or "minority discounts".

For that reason, if you are considering a lifetime gift, you may also require the advice of legal counsel to devise a strategy and to prepare documents to transfer the assets.

So this can be a bit expensive.  But, gifting can radically reduce taxes in certain circumstances and may also need to be coordinated with changes in your wills, trusts, and beneficiary designations. The advice of counsel can therefore be both valuable and can save you and your heirs from later problems that might cost much more to correct. 

If you're already sure that you want to make gifts in 2024, contact our office at 610-933-8069 to set a strategy appointment and to get an estimate of the costs involved.

If you'd like even more information on gifting strategy, see our 2023/2024 update here.

David M. Frees, III
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Attorney, Speaker and Author