Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Spouses Should Be Aware of 'Gift-Splitting' Criteria when Gifting Assets
Author: Scarinci Hollenbeck, LLC
Date: August 26, 2013
Key Contacts
Back
Lawmakers’ decision to both set the estate tax at $5.25 million for 2013 and increase the annual gift tax to $14,000 has been a welcomed sigh of relief for many affluent individuals and business owners. The gift tax, in particular, has historically been a key strategy Americans have used to transfer wealth to future generations and lower their taxable estate or tax liability.
Couples who file jointly have the added advantage of doubling the amount they can gift to individuals at a tax-free rate, enabling them to extend $28,000 in cash or assets to loved ones. However, when one spouse chooses to extend a gift to another person, a scenario known as “gift-splitting” should be discussed to help them avoid federal gift taxes. Gift-splitting works as follows: If an individual or their spouse makes a gift to someone else, that gift can be considered for tax purposes as having been made half by the gifter and half by his or her spouse.
However, the IRS dictates that both individuals must agree to split the gift. This means that either spouse or the couple together could make a gift of up to $28,000 to any person and not be subject to the gift tax, so long as they both agree to it. If they do, they can each can take the annual exclusion for their part of the gift. However, the tax agency also notes that if they split the gift they made, they must file a gift-tax return to show that the individual and their spouse agrees to use gift splitting. The filing requirement is the case even if half of the split gift is less than the annual exclusion.
When gifting large amounts to children or other beneficiaries and utilizing the gift-splitting rule, it may be helpful for spouses to speak with a tax professional to understand their obligations.
- Practices: Tax and Trusts & Estates, Sophisticated Estate Planning & Wealth Preservation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.