DGAA bLAWg

Are Holiday Gifts Subject to Federal Gift Tax?

Web Admin - Thursday, December 21, 2017
Barrington estate planning and tax lawyerThe holiday season is a time of giving, but as you celebrate this time with your family and friends, you may need to be aware of a certain omnipresent aspect of American life: taxes. While it will likely only apply to people who earn a high income or have large financial assets, it is still a good idea to understand the Federal gift tax and the impact it may have on the gifts you give and your estate.

What Is the Gift Tax?

When a person transfers property to someone else without receiving something of equal value in return, this is considered a gift by the Internal Revenue Service (IRS), and it may be subject to gift taxes. The person who gives the gift to someone else (known as the donor) is responsible for filing tax forms for the gift and paying the gift tax.

Gift Tax Exclusions

Certain types of gifts are excluded from taxes, including gifts given to one’s spouse, gifts given to a political organization, and tuition or medical expenses paid on someone’s behalf. For other gifts, an annual exclusion threshold applies. That threshold is $14,000 for 2017, and the threshold for 2018 will be $15,000.

The annual exclusion applies to gifts given to an individual person, so if a donor gives multiple people gifts of less than $14,000 each, they will not owe any gift taxes. For spouses, the exclusion is doubled, so a married couple can give a gift of up to $28,000 without owing gift taxes.

In addition to the annual exclusion, everyone is entitled to a lifetime exemption known as the basic tax exemption. For people who die in 2017, that exemption is $5,490,000, and in 2018, the exemption will increase to $5,600,000. The taxable amount of gifts greater than the annual gift tax exclusion threshold can be applied toward this lifetime exemption, and taxes will not be owed on these gifts. However, any amount of the basic exemption used during one’s lifetime will be deducted from the amount of their estate that is exempt from estate taxes upon their death.

Contact a Schaumburg Estate Planning Attorney

Determining how gift taxes will affect your finances and your estate can be a complex undertaking. If you want to make sure you are protecting yourself and providing for your family’s financial security, the skilled attorneys at Drost, Gilbert, Andrew & Apicella, LLC can work with you to ensure you have met your legal requirements and have the financial resources in place that your family needs. Contact our Rolling Meadows estate planning attorneys today at 847-934-6000 to schedule a personalized consultation.

About the Author: Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Source:
https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes

The Effect of the Affordable Care Act on Income Taxes

Web Admin - Tuesday, January 28, 2014

illinois obamacare tax lawyerThe Affordable Care Act (ACA or "ObamaCare") is a sweeping reform that touches many different areas of the law. One particular area that it impacts is the income tax structure. The law makes many small changes, such as increasing the threshold for deducting a medical expense to 10 percent of a person's adjusted gross income, or adding a new 0.9 percent tax to wages above $200,000. 

But, one particular change can have a large effect on income from real estate sales and trusts. The ACA adds a new 3.8 percent tax on a person's net investment income. But, this new tax only applies to certain people, and often, but not always, those in higher tax brackets.

The Effect on Real Estate Sales

The 3.8 percent tax applies to some sales of real estate, but not to all sales. First, the tax only applies to people making more than $200,000 a year or $250,000 for married couples filing jointly. Even for those people, not all sales qualify. This is because the first $250,000 of profit on the sale of the home does not count as income if the home is the person's primary residence.

And, that number goes up to $500,000 for married couples. A primary residence is a home that has acted as the sellers “main home” for two of the last five years. By way of example, suppose a married couple making over $250,000 a year sold their primary residence for a net profit of $650,000. They would only pay the 3.8 percent tax on the $150,000 in profits that exceed the $500,000 cap.

The Effect on Trusts

Even though the tax only applies to individuals making more than $200,000, it can also affect trusts with more than approximately $12,000 in net investment income, regardless of the beneficiary's income. This means that the tax can affect people earning less than $200,000 if they have an interest in such a trust. In this instance, the 3.8 percent tax applies to all net investment income in excess of the $12,000 cap. However, the law contains many exemptions and exceptions. For instance, certain types of trusts that do not qualify as trusts for purposes of income tax also fall outside of this law.

If you have questions about how the ACA affects your taxes or think you may be subject to the new net investment income tax, contact an Arlington Heights tax attorney today. Call 847-934-6000 to speak to a member of our team. We serve many Northwest Suburban areas including Rolling Meadows, Des Plaines, Crystal Lake, and other nearby communities.

About the Author: Attorney Jay Andrew is founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.



Recent Posts


Tags

meal breaks Illinois registered agent pregnant women personal injury fiduciary rule homestead rights Employment Discrimination Law Mt Prospect Attorney cell phone accidents Rolling Meadows probate lawyer condo association DUI attorney Illinois Transfer on Death Instrument Illinois medical malpractice lawyers Home Remodeling Repair Act bicycle accidents Legal Info boating DUI life insurance lawyer Illinois traffic ticket lawyer civil litigation attorney Illinois civil litigation lawyer in terrorem provision Schaumburg medical malpractice lawyer DMV estate plan Deer Park motorcycle accident lawyer Rolling Meadows boating crash lawyer life insurance claims Illinois personal injury lawyers Palatine civil litigation lawyer home inspection lawyer corporate law Chicago employment attorney drug crimes lawyer Illinois car accident attorney Arlington Heights accident attorney Palatine probate lawyer medical malpractice compensation employment law commercial real estate advance healthcare directive insurance claim Illinois boating accident lawyer Inverness corporate attorney products liability insurance claim dispute Inverness injury lawyer Illinois personal injury lawyer fiduciary rule delay estate tax IRELA cell phone tower data Crystal Lake medical malpractice attorneys Rolling Meadows litigation lawyer Fourth of July Rolling Meadows employment law attorney Schaumburg probate attorney real estate attorney Chicago estate planning license reinstatement probate process Illinois job attorney sexual harassment Arlington Heights employment attorney dog bites Palatine civil attorney Schaumburg Attorney estate planning lawyer Des Plaines criminal attorney operating agreements Rolling Meadows criminal attorney Riverwoods estate planning lawyer elder law personal injury accidents Schaumburg employment law attorneys workers comp residential real estate construction accidents dram shop law motorcycle accident Chicago insurance claim attorneys Illinois personal injury attorney Chicago estate planning lawyer Crystal Lake pet attorney slip and fall accidents Illinois trusts attorney Crystal Lake tax lawyer living wills Rolling Meadows Traffic Lawyer DUI defense trustee Buffalo Grove traffic attorney Rolling Meadows drug defense attorney Palatine punch death Palatine business attorney employment contract product liability no contest clauses anesthesia errors automated cars unpaid overtime Des Plaines medical malpractice attorney Colin H. Gilbert Barrington Illinois estate planning lawyer Illinois living will golf accidents commercial leases Long Grove real estate attorney taxes personal injury attorney medication errors Arlington Heights wills and trusts lawyers truck collisions jet ski accidents Home Sale Contingencies Schaumburg estate attorney attorney fees digital information medical malpractice claims foreclosure Policy Cancellation license reckless homicide Rolling Meadows business lawyer Inverness accident lawyer healthcare claims overtime pay Arlington Heights personal injury lawyer gift taxes Illinois medical malpractice attorney Inverness real estate lawyer Arlington Heights personal injury attorney medical research breathalyzer test driving traffic violations subcontractor Crystal Lake employment attorney Buffalo Grove real estate attorney spinal cord injury Barrington employment law attorney digital media accounts, estate planning, Arlington Heights estate planning attorney, Barrington employment attorney Palatine trusts lawyer Rolling Meadows employment attorney irrevocable trust Buffalo Grove law firm natural gas hiring employees Illinois red light cameras Illinois rollover accident lawyers surgical mistakes Palatine law firm landlord mortgage jet ski Illinois estate planning attorney traffic violations defense clemency employment attorney Thanksgiving speeding sole proprietorship Illinois insurance claim dispute lawyer Self-Directed IRA Accounts Des Plaines injury law firm Crystal Lake injury attorney deed transfer car accidents POA South Barrington real estate lawyer Crystal Lake car accident attorney disability benefits Schaumburg criminal law attorney workplace sexual harassment Crystal Lake law firm Crystal Lake personal injury lawyer senior citizens Arlington Heights insurance attorney Illinois jet ski accident lawyer natural gas explosion Palatine real estate lawyer privacy laws workers compensation traumatic brain injury problem employees paid sick leave Crystal Lake civil litigation lawyer Illinois DUI attorney Palatine workers compensation lawyer Illinois medical malpractice case DGAA accidental death benefits compensatory time rollover accidents forming a corporation in Illinois child safety pet bites living trust workers compensation benefits Long Grove wills and trusts attorneys medical malpractice trucking accident lawyers Deer Park traffic lawyer Illinois insurance claims lawyers comp time insurance agents marijuana drug crimes murder charges CAM Illinois small business trucking accidents insurance disputes fault based insurance consent to a search Rolling Meadows insurance dispute lawyers Jay Andrew Chicago lawyer eluding a police officer Rolling Meadows medical malpractice lawyers Arlington Heights wills and trusts attorneys Des Plaines Traffic Lawyer Illinois Probate Act of 1975 FMLA Rolling Meadows marijuana attorney involuntary manslaughter nursing home negligence Rolling Meadows traffic attorney Chicago attorney Illinois employment law attorneys Inverness personal injury attorney Rolling Meadows car accident lawyers Retaliatory Discharge severance agreements Affordable Care Act pet law Chicago will attorney, social media platforms, Illinois estate planning lawyer, Buffalo Grove probate lawyer Liquor Control Act gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys hit and run accident head on collisions deadly crashes Arlington Heights employment law attorneys Barrington civil litigation attorney probate lawyer Inverness DUI lawyer life insurance policy Crystal Lake insurance lawyer Arlington Heights TBI attorney Des Plaines real estate attorney Detainer Actions wrongful death Rolling Meadows insurance lawyer modern family estate planning Illinois insurance attorney underage DUI Buffalo Grove traffic lawyers Inverness real estate attorney comparative negligence rumble strips startup company Crystal Lake traffic lawyer institutional trustee Illinois employment attorneys Schaumburg traffic lawyer Barrington medical malpractice lawyers Arlington Heights tax lawyer health insurance dispute changes to mortgage law Fair Labor Standards Act privacy rent to own real estate contracts dealing with problem employees traffic tickets Illinois workplace lawyer Chicago insurance law firm Barrington criminal defense lawyer rollover car crashes Schaumburg Des Plaines drug crimes lawyer spinal cord injuries Barrington boating accident attorney investment property Palatine elder law attorney Crystal Lake employment lawyer Rolling Meadows estate planning attorney car crash injuries employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys Illinois LLC creation Barrington criminal lawyer Whistleblower Claims Forcible Entry real estate leasing federal crimes car accident lawyer drunk driving statistics Schaumburg car accident attorney Rolling Meadows insurance dispute lawyers, insurance dispute Illinois construction accident attorney Palatine employment law lawyer personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys traffic accidents Barrington Traffic Lawyer Kenilworth estate planning attorney Arlington Heights medical malpractice lawyer Crystal Lake will lawyer Deer Park personal injury lawyer Barrington estate planning lawyer Schaumburg civil litigation attorney cell phone Illinois Sales Representative Act digital assets distracted driving accident victims breach of contract liability claims creditors insurance adjusters Illinois driving without license IRA trust transfer IRS field sobriety test power of attorney Barrington employment law firm Des Plaines claims law firm insurance claim denial rest breaks right to work employees Palatine employment attorney special needs trust Transfer on Death Instrument Do Not Resuscitate coronavirus Inverness civil lawyer Palatine estate planning lawyer Illinois criminal defense attorney Illinois Trust Code employment lawyer Crystal Lake bike accident lawyer expungement Chicago car accident lawyer federal regulations for LLCs Crystal Lake criminal defense attorney trauma after an accident crossover accidents Arlington Heights criminal lawyer Rolling Meadows traffic law firm trench injuries ACA Arlington Heights real estate lawyer Illinois real estate Crystal Lake pedestrian accident lawyer Chicago employment lawyer Buffalo Grove insurance claim dispute lawyers Long Grove real estate lawyer School Visitation Rights Act Schaumburg wrongful death attorney Palatine traffic lawyer Arlington Heights wills and trusts attorney employment law, Illinois employment laws Family Medical Leave Act Schaumburg personal injury lawyer personal injury lawyer holiday statistics Illinois corporate lawyer Arlington Heights lawyer Illinois Wage Payment and Collection Act slip and fall Illinois trucking safety social media after death Illinois employment law denied insurance claim Rolling Meadows insurance attorney Schaumburg employment attorney foreclosed rental property Des Plaines accident attorney Palatine construction attorney estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, Crystal Lake medical malpractice law firm car crash internet PTSD Palatine corporate law attorneys BAC Palatine traffic accidents Rolling Meadows corporate lawyer Kenilworth estate planning lawyer underinsured motorist mass shooting bike accident estate planning Buffalo Grove personal injury lawyer Illinois tax attorney independent contractor back injuries filing a medical malpractice claim Illinois Human Rights Act probate fees living trust benefits unauthorized overtime car crashes pizza emoji Des Plaines drug lawyer manufacturing Palatine corporate attorney Long Grove estate planning trust payments criminal record real estate lawyer Deer Park traffic accident attorney Illinois workers compensation attorney insurance claim delay business litigation insurance attorney overtime violations first degree murder BUI Super Mario Illinois employment law attorney Schaumburg elder law lawyer Des Plaines DUI attorney Chicago biking tips estate planning trusts Deer Park medical malpractice attorney Buffalo Grove medical malpractice lawyers Crystal Lake estate planning lawyer Rolling Meadows personal injury attorney Arlington Heights estate planning attorney job lawyers living trust vs will Buffalo Grove corporate attorney Illinois attorney Illinois elder law attorney Arlington Heights traffic attorney LLCs Barrington personal injury attorney revenge porn Illinois traffic laws pedestrian injuries, pedestrian fatality condo Illinois motorcycle accident lawyer commercial leasing Illinois pedestrian accident attorney Illinois injury lawyer income distribution deducation license suspension life insurance agent Illinois insurance claim dispute lawyers Crystal Lake accident attorney fatal car accidents loopholes Rolling Meadows real estate attorney Deer Park workers compensation lawyer Mount Prospect real estate lawyer elder abuse real estate attorneys insurance claims icy parking lots Arlington Heights Traffic Lawyer guardianship attorney Illinois personal injury wills license revocation construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Schaumburg estate planning attorney underfunded trust drug possession estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers Food and Drug Administration's Food Safety Modernization Act Des Plaines motorcycle accident attorney Buffalo Grove employment lawyer FSLA employee discrimination real estate traumatic brain injuries preventable medical errors Illinois defective products attorney Chicago corporate attorney employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, Colin Gilbert South Barrington real estate attorney small business brain injury Rolling Meadows Attorney Chicago trucking accident attorney criminal liens boating accidents murder Illinois wills and trusts BAIID car accident lawyers owner responsibility Illinois Illinois wills and trusts attorneys caregiver Schaumburg personal injury lawyers Crystal Lake business law attorneys Schaumburg construction accident lawyer Rolling Meadows personal injury lawyers Schaumburg estate planning lawyer Crystal Lake employment law attorney criminal defense traffic laws Illinois insurance lawyer Illinois real estate lawyer Inverness probate lawyer liability Inverness estate planning lawyer Attorney Ken Apicella Barrington injury attorney Illinois wrongful termination lawyer Barrington attorney landlord tenant law Schaumburg drug defense lawyer Illinois home inspection motorcycle accident lawyer suspended license Inverness insurance attorney Illinois insurance claim attorney drunk driving Illinois probate lawyer digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers loss of consortium Long Grove estate planning attorneys insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Arlington Heights Attorney defective products lawyer Rolling Meadows personal injury lawyer Illinois employment laws medical marijuana Rolling Meadows criminal lawyer Joliet general practice lawyers IRA benefits Barrington business law firm Illinois will lawyer Illinois employment lawyer Schaumburg criminal attorney employee rights distracted driving accidents work unions traffic deaths Deer Park criminal attorney personal injury law firm uninsured motorist DUI penalities capital gains tax Illinois speeding lawyer Arlington Heights car accident lawyer estate attorney insurance dispute attorney construction contracts car collision Crystal Lake medical malpractice lawyer Des Plaines unpaid assessment Deer Park real estate law firm Kenilworth estate planning attorneys Mount Prospect wills and trusts lawyers Des Plaines civil attorney Palatine personal injury lawyer denial of life insurance food poisoning Chicago will attorney denied insurance claims Buffalo Grove injury lawyer Illinois lawyer texting while driving pain and suffering insurance agent negligence marijuana crimes attorney Illinois workplace discrimination attorney Buffalo Grove car accident lawyer Des Plaines pet law attorney drug crime ObamaCare Inverness elder law lawyer Des Plaines personal injury attorney murder defense preventing accidents blended families Barrington real estate lawyer new real estate form Barrington workers compensation attorney Deer Park employment law attorney Palatine insurance lawyer real estate zoning Chicago traffic lawyer digital evidence Rolling Meadows tax attorney ken apicella insurance dispute Crystal Lake car accident lawyer Illinois traffic attorney Buffalo Grove criminal defense lawyer DUI Arlington Heights injury attorney real estate contract minimum wage vacation home fines Deer Park DUI lawyer probate claims civil rights violation Barrington drug crime attorney Illinois bicycle safety estate planning attorney Illinois estate planning law firm Palatine criminal defense lawyer Crystal Lake personal injury attorney estate planning for college students bicycle dooring accidents Palatine Attorney wills and trusts trusts pedestrian accidents insurance claim dispute attorney defective products Des Plaines personal injury lawyer Illinois workers compensation lawyer Buffalo Grove personal injury attorney Crystal Lake traffic attorney Arlington Heights wills and trusts lawyer texting and driving Illinois insurance dispute lawyers Palatine injury attorney Illinois mortgages Schaumburg corporate attorney college kids Illinois traffic attorneys civil litigation Illinois collections attorney financial advisors swimming pools Schaumburg injury lawyer Schaumburg real estate lawyer wrongful termination installment contracts Inverness traffic law firm Des Plaines tax law firm real estate closing auto accidents Rolling Meadows DUI lawyer Des Plaines collections attorney Mount Prospect elder law attorney traffic crimes bad faith insurance claims Barrington estate planning attorney sexual images Illinois traffic accident lawyer hands free device Crystal lake insurance dispute attorney wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace Rolling Meadows Barrington litigation attorney Rolling Meadows accident lawyer Arlington Heights pedestrian accidents medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers contracts boating under the influence TBI Landlord Tenant Ordinance pay when paid contract Schaumburg personal injury attorney insurance claim denials personal injury claim wage theft controlled substance drugs whistleblower protections Illinois insurance disputes llinois Real Estate Lawyers Association Long Grove estate planning attorney dynasty trusts healthcare Class A misdemeanor Arlington Heights car crash attorneys Des Plaines personal injury lawyers premises liability Illinois business lawyer Illinois employment law firm personal injury claims Des Plaines insurance attorney Deer Park accident attorney Illinois pet lawyer Exclusions Illinois law pedestrian-automobile accident car accident criminal law Illinois medical malpractice claim Illinois employee rights attorney. Rolling Meadows employment law attorneys power of attorney for healthcare Palatine drug lawyer low-ball insurance settlement insurance denials insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys Barrington personal injury lawyer probate Palatine employment lawyer Federal Food Drug and Cosmetic Act caretaker rights Illinois estate planning traffic offenses appealing an insurance claim Illinois Smoke Detector Act vacation home Arlington Heights trucking lawyer DNR unfunded trust GM ignition switches insurance denial appeals blood alcohol content insurance negligence Des Plaines real estate lawyer probate claims process employee misclassification tax attorney Illinois Workers’ Compensation Commission Schaumburg insurance lawyers pedestrian accident Illinois business law atorneys

Archive