Annual Gift Tax Exclusion

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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.