“My client is asking about gifting money to their beneficiaries. They wished they would have done it last year because of the $5,000,000 exemption. How much can they gift this year?”
You’re in luck – this is definitely the year to take full advantage of gifting! The Lifetime Gift Tax Exemption for this year is up marginally from last year – to $5,120,000, with the gift tax rate capped at 35%. It is currently scheduled to go back to $1,000,000 next year at a rate of 55%, so your clients are on the right track to gift that money today! And you are on track to an exceptional sale! Be sure that your client works with their accountant to report the gifting properly. Typically IRS form 709 is used for this, you can download a 2011 version here.