i have a 2.5 million dollar estate
i want to gift 1.5 million the next 2 years and do it tax free
can anyone explain if i can do that..and how to do it
Yes, the gift tax exclusion for 2011 and 2012 is $5,000,000 per person.
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Robert J. Suhajda, MS,CPA
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Tax Relief Lawyer. Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns, Homeowner Association Strategist.
You should be able to do that. You should consider what assets you want to gift, whether a trust may be better than an outright gift, and of course, you should consider Oregon estate tax laws as well. (Which based on your plan to keep a $1 million estate, sounds like you have). An appointment with an attorney may be a good investment. The last thing you want to do is to make a mistake on a 2.5 million dollar estate.
Let's assume (1) you have not previously made any reportable gifts, (2) your gifts will be made by wire transfer of immediately available funds to other individuals and (3) you are not married. Then you can make gifts totaling $5,000,000 in 2011 and 2012 without incurring any gift tax. You must file a Form 709 (Gift Tax Return) in 2012 if the gift to any one individual in 2011 exceeds $13,000. You must file another gift tax return in 2013 if the gift to any one individual in 2012 exceeds $13,000. Since these rules reflect changes made at the end of 2010, the current Form 709 and its instructions do reflect the rules for gifts made in 2011 and 2012. Also take care to complete your gifts before 2013 when the $5,000,000 exemption is scheduled to be lowered.