The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift. The tax applies whether the donor intends the transfer to be a gift or not, and the gift tax applies to the transfer by gift of any property.

Currently a donor can transfer $13,000.00 per year per person with no tax consequences. Further, and above and beyond the $13K annually exclusion, there is currently a $5 Million dollar lifetime exemption that allows a person to transfer the first $5 Million tax free, whether the gifts are made during their lives, or upon death.
This current law is scheduled to “sunset” i.e. revert back to previous law, which is much less favorable to the donor on December 31, 2012.

While this law is scheduled to sunset, there are planning techniques, that with the skillful assistance of legal counsel, will help you reduce or in some cases eliminate tax liability for certain gifts.

Panagopoulos Law P.C. helps clients implement sound gift planning programs that help clients and their families pass wealth at the fairest possible tax levels.