Estate and gift tax issues are complicated and may be difficult to understand.
When planning an estate or dealing with assets, it is common for one person to transfer assets to another.
This is what is technically referred to as a gift and it is important to understand what types of gifts are subject to tax and which ones aren’t.
Many gifts that typically are not subject to gift tax include gifts between spouses, gifts that are donated to a charity or political organization, gifts that are used to pay for another person’s education, tuition, or medical expenses, as well as gifts that are within the limit for the amount allocated for a year.
However, even though these gifts are not commonly subject to gift tax, there are still rules that apply.
For instance, there are limits on the amount that may be given and if you go over that limit, you will be held liable.
Therefore, it is important to always discuss your plans with an experienced attorney to ensure that you have stayed within the confines of the law and complete all of your gift transactions in the best manner.
If you are looking for some information for reading material, the Internal Revenue Service provides a guide, Publication 950 that focuses solely on gift tax issues.