A gift, according to the Internal Revenue Service (IRS), is “[a]ny transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.” Generally, the donor is responsible for paying the gift tax; however, the donee may agree to pay the tax instead. If you are considering an arrangement wherein the donee is paying the gift tax, contact an attorney at Kohler & Smith Co., LPA today to ensure that your goals are achieved and IRS requirements are satisfied.
The federal government allows donors to give up to the annual exclusion amount (currently $13,000) to each donee without an imposition of gift tax. Like your individual federal income tax return, the gift tax return is due on April 15th following the year that the gift is made. The top gift tax rate is 35% for 2010, and, without action by Congress, the rate is schedule to jump to 55% in 2011. If you are interested in gifting a portion of your estate to family, friends, or an unqualified entity, call (614) 888-4911 and the lawyers at Kohler & Smith Co., LPA can help you with your tax planning needs.