Natural instinct often urges parents to help their children financially. But when they seek to do so, they must be mindful of the interest the federal government will collect. Transfers of wealth that exceed an exclusionary level are subject to the federal gift tax. Fortunately, with careful planning, a grantor can limit or exclude the government from taking a cut of the proceeds.<\/p>\n
The government permits an annual exclusion amount, currently set at $14,000 per year. That sum is not subject to either reporting or taxation. And that figure can effectively be doubled through the procedure known as gift-splitting, whereby each spouse exercises the annual exclusion and sends a combined $28,000 tax-free gift to a child. <\/p>\n
The gift-splitting provision can be especially useful when a couple wants to help their married child with a big-ticket item (such as the down payment for a house). If the gifts are properly timed, a (more…)<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Natural instinct often urges parents to help their children financially. But when they seek to do so, they must be mindful of the interest the federal government will collect. Transfers of wealth that exceed an exclusionary level are subject to…<\/span><\/p>\n