We have a gift tax to prevent people from exploiting a loophole. If you were allowed to give tax-free gifts, you could give away your assets while you are living to avoid the federal estate tax. The estate tax was enacted in 1916, and there was no accompanying gift tax initially. Many wealthy people simply gave away assets while they were living at that time. Before long, the powers that be reacted through the implementation of a federal gift tax.
Topics covered in this report include:
- Annual Tax-Free Gifts
- Unified Lifetime Gift and Estate Tax Exclusion
- Tax Free Tuition & Medical Gifts
- Gaining Transfer Tax Efficiency