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.


Estate Planning and the Annual Gift Tax Exclusion

Web Admin - Friday, December 23, 2016

When you have a moderate to large estate, it is important to ensure that you utilize every money-saving strategy possible. One of the more popular is the annual gift tax exclusion, which is often given to family, friends, and charities around the holiday season. The following offers more information about the annual gift tax exclusion in Illinois, and how you can use it in your estate plan to benefit your beneficiaries now, and far into the future. 

Understanding the Importance of Exclusions  

Upon your death, all of your estate assets will be inventoried and valued. This analysis is done to determine if any state or federal taxes may be owed on the estate. In some instances - in particular, estates for which few to no exclusions were used - the tax burden could significantly decrease the final value of the estate. There are even instances in which the entire estate must be liquidated to meet the tax obligations. The use of annual gift tax exclusions can mitigate this potential issue, and may leave more of your legacy behind for those you intend. In some instances, effective planning may even eliminate any final tax debt altogether. Keep in mind, however, that there are limitations, exemptions, and rules that must be adhered to when using the annual gift tax exclusions. 

Utilizing the Annual Gift Tax Exclusion in Your Estate Plan 

To reduce their federal tax obligations upon death, taxpayers may transfer up to $5.45 million in their lifetime (increasing to $5.49 million in 2017) to their heirs, tax-free. Annually, the maximum amount of tax-free gifting is currently set at $14,000. However, couples may combine their gift exclusion and donate up to $28,000 per year to the heirs of their choosing. Keep in mind that your estate will not be granted any additional tax benefits once you have reached the lifetime limit - unless, of course, the lifetime exclusion is raised. It is also important to understand that poorly planned gifts may not offer the same amount of benefit to you or your heirs. An attorney can help you determine which options may be most suitable for your situation. 

Contact Our South Barrington Estate Planning Lawyers 

At Drost, Gilbert, Andrew & Apicella, LLC, we know how important it is to plan for the future. Skilled and experienced, we can help you utilize creative estate planning solutions that benefit your heirs and preserve your legacy. Learn more about how our South Barrington estate planning lawyers can assist you. Call 847-934-6000 to schedule your personalized consultation today.

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.


Recent Posts


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