Give The Gift Of Wealth This Holiday Season

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

With Hanukkah having just started and Christmas approaching, chances are you're thinking about all of the material items you need to run out and buy before it's too late. However, for those with an estate planning mindset and focus, there's another gift you may want to consider - a wealth transfer.

Did you know that you are permitted to gift up to $14,000 to any recipient of your choice without any tax consequence? To make things a bit clearer, this means that an individual can gift up to $14,000 to an unlimited amount of individuals over the course of the year as a means of distributing wealth from their estate. So long as you have enough income available for you to use for your own personal spending, this is one approach that allows you to give money away without the recipient accumulating much (if any) in taxes or fees.

But let's break it down a bit further. Below, we cover a few FAQs about wealth transfer and gift taxes:

Q: What is classified as a gift?

A: In this example, a gift is any transfer of money made to an individual where "full consideration is not received in return."

Q: Are gifts taxable?

A: Technically speaking, any gift can be considered a taxable one. But, there are several exceptions outlined by the IRS. For example, gifts that do not exceed the annual exclusion during any one calendar year or gifts that are made to your spouse are usually not viewed as taxable.

Q: If a gift is taxable, who pays it?

A: If the plan you've set up requires a gift tax, the donor is usually responsible for the payment. However, if the receiver agrees to taking care of the tax, adjustments may be made where the donor does not have to.

Q: Can gifts be deducted on tax returns?

A: For the most part, you cannot use the value of gifts as deductions on your tax return - the only circumstances where it can be done are if you are gifting money to charitable organizations.

For more information on this topic, please check out this article from the IRS.

At American Investment Planners LLC, our team of financial planners are extremely knowledgeable about estate planning and can help you develop a strategy that allows you to take advantage of gift giving in this way. To set up an appointment with us to get started and learn more, please call (516) 932-5130 today.