The truth about the ‘gift tax’

September 1, 2017

Gina
One of the most common areas of confusion with respect to estate planning is gift tax. Gifts are made for a myriad of purposes, including celebrating occasions, helping a child, protecting assets from potential nursing home costs, or reducing an estate for estate tax purposes. Gifts are often made without the realization that certain gifts must be reported to the government via a gift tax return. When taxable gifts have been made, the gift tax return must be filed by April 15th of the following year – i.e. along with your income tax returns.

Mass is state tax-free! Massachusetts does not impose a gift tax regardless of the amount that has been given away. For Massachusetts residents, tax is imposed only by the federal government. That being said, most people believe that they can gift $10,000 per year without reporting it. In fact, the annual exclusion amount is based upon the Consumer Price Index, and the exclusion has increased gradually from $10,000 in 1997 to $14,000 in 2017. This means that an individual

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by: Gina M. Barry

Prime
September 2017

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