Posted on June 08, 2005 at 16:58:38:
Some people make large financial gifts to move money out of their estates. Some just want to help out family members. Either way, the rules are pretty much the same.
You can give $11,000 a year to anyone, free of gift taxes. A married couple, filing together, can give $22,000. Make a gift to a young couple trying to scrape up a down payment, and you can make the gift for $44,000! You can give up to $1 million over that over your lifetime, but it will cut into your future estate tax exemption.
There’s more: there’s no limit to what you can pay to a medical or educational institution to cover the costs of another person. If you can afford it, you can send your grandchildren to college—all free of gift taxes!
Sometimes it’s worthwhile to move assets—and pay the gift tax—assuming that later appreciation will increase their value even more.