Gifting for 2015

While the estate tax affects very few people these days, it has a major impact on those few to whom it applies. 

If you die in 2015, your first $5.43 million passes without any federal estate tax. In 2015 and 2016, you can make an unlimited number of $14,000 gifts of cash or other property without having to file a gift tax return and without reducing that $5.43 million amount. So for each $14,000 gift, you are saving over $5,000 in estate taxes.   

Couples can combine their annual exclusions and give away $28,000 worth of property tax-free, per year, per person. 

Keep in mind annual giving is based on a calendar year. If you miss a year, you can't go back and claim that year's exemption amount. But if you spread a large gift over two or more years, you may escape gift tax complications. For instance, if you give your son $20,000 on December 17, $6,000 of it is taxable. You will have to file a gift tax return and you will use up $6,000 of the total amount you can give away or leave free from estate tax. But if you give your son $10,000 in December and $10,000 on January 1, both gifts are tax-free. 

If you have a taxable estate, don't forget to make your gifts for 2015. Also, remember that your check must clear your account prior to the end of the year. So if there is any question, you should use cashier's checks for your gifts.