by Rose Law Firm of Napa Valley, Inc. | Oct 28, 2020 | Annual and Lifetime Gift Tax Exclusions, Estate Planning, Q&A |
2022 update: $15,000 per year in 2021 and $16,000 per year in 2022
A: The short answer is NO: you almost certainly will NOT have to pay any gift taxes. Remember, under current law, you can make $11.58 million dollars’ worth of gifts in your lifetime without incurring any gift tax liability. Therefore, if you don’t want to pay the gift tax, all you have to do is DECLARE the $85,000 that you gifted over the $15,000 annual allowable amount on a gift tax return, and the IRS will deduct that $85,000 from the lifetime exemption amount you have remaining. For this reason, unless you’ve already maxed out your allowance (which means you are VERY generous indeed), most people have a whole LOT more money and assets they can give away before the tax man ever shows up at their door with a bill!
