We all have a one million dollar lifetime gift-tax exemption. This year you can gift $13,000 (or $26,000 if a joint gift with spouse) to any individual without having to reduce your million dollar exemption. If you want to gift more than $13,000, you can do so without tax liability although you will need to file a gift tax return and reduce your lifetime exemption. You can even gift fractional interests in your home to your children or grandchildren. If you want to help your children or grandchildren with their education a college saving plan allows you to bundle five years of gifts ($65,000 or $130,000 if joint) into one year. This money grows tax free and must be used for tuition, fees and books. If you choose to pay your grandchild's tuition directly the amount paid does not count against the $13,000 or million dollar exemptions. Gifting also reduces your taxable estate (though in 2010 there is no estate tax).
Ho, Ho, Ho, and happy gifting.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).