December 05, 2017 | News
By December 31, you may use your “annual exclusion” by giving $14,000 free of gift tax to as many individuals as you wish without using any of your $5.49 million lifetime exemption from gift and estate tax. Spouses can combine their annual exclusion amounts to make gifts of $28,000 per donee, subject to certain gift tax reporting rules. Because annual exclusions do not carry over into subsequent years, you will lose your annual exclusion if you do not make such gifts by December 31. Making annual exclusion gifts can reduce the potential tax burden on your estate. An annual exclusion gift may consist of almost any asset, including stocks, bonds, real estate, cash, and partnership interests. Annual exclusion gifts may be made to certain trusts and can be made as custodial gifts for minors.
To qualify as a 2017 annual gift, your gift must be completed by December 31, 2017, which requires that the donee have complete control of the gifted asset. For example, a gift of stock requires that all transfer paperwork be finished and submitted, a gift of a check requires that the check be cashed or deposited, and a gift of real estate requires that the signed deed be filed for recording, all by December 31.