Annual Gift Tax Exclusion

By DouglasTurner.com • Jan 30th, 2008 • Category: Estate Planning in Colorado: Glossary of Terms

Note: The following are general definitions and any particular term may be defined differently by a particular statute, case law, or the definitions section of the document in question. Consult legal counsel before acting on any information contained in this website.

Annual Gift Tax Exclusion

(As of January 2008. Definitions and statutes may change after this date.)

Annual exclusion is the amount of property the IRS allows an individual to give to another during a calendar year before a gift tax is assessed and/or a gift tax return must be filed. In 2008, a person can give a sum of $12,000.00 per calendar year to anybody without paying gift tax. A husband and wife together can give property amounting to $24,000 to each person. To qualify for the annual exclusion, the gift must be one that a recipient can enjoy immediately and have full control over. In theory, there is no limit to the number of people you can give gifts to which qualify for the annual exclusion. The gift amount is indexed to inflation but does not rise until the next $1,000.00 level is attained. For example, if in 2011 the indexed amount is $12,900.00, the annual gift tax exclusion is still $12,000.00.

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DouglasTurner.com. This column is not legal advice nor does it create an attorney-client relationship with the reader. Due to limited space, complex legal concepts and rules may be stated in terms of general concepts. Based on 2007 Colorado and Federal law. Consult legal counsel before acting on any information contained in this column.
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