The Granny Gift Tax
The granny gift tax is a cute way of saying the
Well, isn’t that special?
In truth this tax is simply called Gift Tax. The IRS devotes a lot of words about this tax here:https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
They cover every question known to mankind on gift taxes on that page.
I call it the granny gift tax because grandparents and parents have been giving money to their siblings for a little longer than giving itself has been around.
The rules are the same for same sex married couples. The granny gift tax cares not about your sexual orientation. The granny gift tax is an equal opportunity tax mechanism.
Taxes Can Have a Silver Lining?
This could be quite an estate planning tool for people with a high net worth. For example, assume a married couple has three children and each one of them is married. So, that makes a family of six eligible receivers.
Six times $30,000 equals $180,000. A substantial reduction in the size of the estate meaning the gifts reduced the estate’s value for taxing purposes. But, of course there may be more eligible receivers in this family tree thereby reducing the estate’s value for tax purposes.
Above All Else, Always Take Care of Your Gift Taxes
Gifts larger than $15,000 should be coordinated with your estate planning accountant and/or attorney. In fact you should always consult a licensed, knowledgeable, competent professional. Running afoul of the rules could turn the gift from wonderful intention into sour apples. The taxman is the no excuses, non-forgiving type.
And, this doesn’t only apply to cash. But, securities, real estate, coins and all other assets. Any value over the magic base amount of $15,000 is subject to tax.
The granny gift tax has exceptions and exemptions. They will be covered in a separate article. The purpose of this informational resource was to point out the gift amount. And alert you to the possible tax consequence, should you go above the maximum.
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