Wednesday, July 2, 2014
As we head into the second half of 2014, now is a good time to take inventory of you financial and tax situation, especially if you are separated or divorcing.
The first thing to know is that the IRS has a maximum tax exclusion of $14,000 for gifts. Anything above this amount requires a Gift Tax Return to be filed by the person giving the gift. It is possible that and the individual giving the gift will have to pay tax as well. Anyone giving gifts in excess of $14,000 must file a form 709. The exception to this rule is if the gifts are made to a spouse.
Though this is mainly an estate-planning concept, it nevertheless can be relevant in a divorce action. If you have questions regarding gifts and gift exclusions, speak to an attorney.
See Aaron Weems, Family Law Tax Issues: The Gift Tax Exclusion, Mondaq, June 30, 2014.