Search Site
Menu

Holiday Gifting

Holiday Gifting

The holiday season is fast approaching and for many people, this is a time of exchanging gifts with family or charitable giving.  Those who choose to make large gifts to individuals during this time should be aware of the annual exclusion amount set by the IRS.  The annual exclusion is the amount in cash or other assets, you can give every year to as many individuals as you like, without incurring the gift tax (up to 40%). The annual exclusion for 2014 is $14,000. It is periodically adjusted for inflation, in $1,000 increments, and hasn’t been raised since 2013. We do not anticipate that it will increase in 2015.

For gifts that exceed this annual exclusion amount, those will trigger mandatory filing of IRS Gift Tax Form 709 and possible payment of gift taxes.  However, gifts that exceed the annual exclusion count against what is commonly referred to as the “lifetime exemption” or the “estate tax exemption”, depending on the context.  The key item to understand is that once you have exceeded the annual exclusion ($14,000), there is currently a $5.34 million limit on the total amount you can give away – either during life or through your estate plan. If you exceed the limit, you (or your heirs) will incur the up to 40% tax liability. Even if you don’t exceed the limit while you are alive, your lifetime gifts will reduce how much you can pass tax-free through your estate plan.  The basic exclusion is indexed for inflation and is expected to be $5.43 million for 2015.

A check to a favorite charity is also a regular giving tradition.  In order to properly qualify for the tax deduction, you must give to a qualified organization.  If you receive a benefit because of your contribution such as merchandise, tickets, or other goods, you can deduct only the fair market value of the benefit.  Regardless of the amount, to deduct a contribution, you must maintain a bank record or a written communication from the organization containing the name of the organization as well as the date and amount of the contribution.

For rules on what constitutes a qualified organization, you can review IRS Publication 526, Charitable Contributions, at https://www.irs.gov/publications/p526/index.html.  You should also plan to discuss your gifting with both your estate planning attorney and your CPA.  These professionals can assist you in optimizing the benefits for your holiday generosity.

Wendy Lambie

Phone: 281-367-1222

Fax: 281-210-1361

[email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact a Dedicated Texas Business Lawyer To Schedule a Consultation
Call 281-367-1222 or contact us online to schedule a meeting.

Strong In Action

  • Spring 2021

    The Strong Firm prevails in dispositive motion regarding Texas economic loss rule resulting in dismissal of claims again party.

    Read More
  • Spring 2019

    The Strong Firm successfully forecloses first priority lien against multi-million dollar commercial asset.

    Read More
  • Spring 2021

    The Strong Firm secures writ of reentry after unlawful lockout of commercial tenant.

    Read More
  • Spring 2021

    The Strong Firm prevails in writ of mandamus proceeding involving denial of temporary restraining order to stop foreclosure sale.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  • Peer Rated 2022 Award
  • Clio Client-Centered Certification

Recent Blog Posts

The Future of Non-Compete Agreements: Executive Order on Promoting Competition in the American Agreement

In July 2021, President Biden signed an Executive Order aiming to limit the use of restrictive covenants in employment relationships. Opening with the premise that “a fair, open, and competitive marketplace has long been a cornerstone of the American economy, while excessive market concentration threatens basic economic liberties, democratic accountability,
Read More
The Future of Non-Compete Agreements: Executive Order on Promoting Competition in the American Agreement

Estate Planning: A Sophisticated Plan for Complexities

More sophisticated estate planning may be appropriate for people that: have sufficient net worth to consider tax planning; own assets in more than one state or jurisdiction; highly prize privacy; have blended families, and/or have a history of family discord (“Complicating Factors”). In 2022, the net amount a person can have
Read More
Estate Planning: A Sophisticated Plan for Complexities

Estate Planning: A Plan for Everyone

A common misconception is that estate planning is for the wealthy, with an abundance of assets, including retirement plans, life insurance and annuities. However, the truth is that everyone over the age of 18, regardless of wealth, socioeconomic class or marital status should have a basic estate plan designed for
Read More
Estate Planning: A Plan for Everyone

The Strong Firm P.C. Presents The Ice Rink At The Woodlands Town Center – VIP Preview Party – Thursday, November 18, 2021 – 6 PM-9PM CST

  Please join The Strong Firm P.C. at the exclusive VIP Preview Party for The Ice Rink at The Woodlands Town Center presented by Woodforest National Bank for the 2021-2022 Holiday Season! This year all proceeds from ticket sales and any additional collected donations will go 100% to YES to YOUTH - Montgomery County Youth Services! Donation receipts will be
Read More
The Strong Firm P.C. Presents The Ice Rink At The Woodlands Town Center – VIP Preview Party – Thursday, November 18, 2021 – 6 PM-9PM CST
  • Video Vault


    Watch videos done by our legal team to gain a better understanding of your legal needs. Our lawyers give video insight into areas such as Real Estate, Business Law, Mergers & Acquisitions and much more.
Contact us

Quick Contact Form