You can currently give away up to $11.7 million dollars to other individuals during your life or upon your death without paying any gift tax. However, even though you do not need to pay gift tax on gifts made before you reach this amount, you do need to file a gift tax return, otherwise known as a Form 709.
The only exceptions to this rule are: (1) if your total gift to each individual for the year was under $15,000; (2) you paid qualified medical or education expenses of another person directly to a provider; or (3) the gift was made to your spouse. The $15,000 exclusion amount is per person, which means you and your spouse can give an individual person $30,000 per year without filing a gift tax return.
Once you have used all of your gift tax exemption amount, you must pay gift tax on any additional gifts that are not listed as exceptions above. The gift tax rate currently ranges from 18% to 40%. Strategic planning can often eliminate gift tax liability. If you would like to make significant gifts during your lifetime, we recommend working closely with an estate planning attorney and an accountant. To speak with an experienced attorney about gift tax, call us at 786-832-4694.