Wondering how much money you can give WITHOUT getting hit with “gift tax”❓
Remember this is COMPLETELY DIFFERENT than giving money away to get Medicaid eligibility. Different rules for Medicaid.
Let’s break it down:
.As of 2020, you are allowed to give $15,000 per PERSON per YEAR.
But what if you gave your granddaughter $30,000 as a gift to help her with her down payment on a house?
.👉 Here are your options, you can either:
File a gift tax return on that extra $15,000
Apply that extra $15,000 to your LIFETIME gift exclusion
Okay, what’s the lifetime gift exclusion? It’s the total of what you can give over your entire lifetime, which limits at $11.58 million as of 2020.
So if you want to avoid getting taxed and you’re pretty sure you won’t be giving over $11 million in your lifetime, then you can easily apply that extra $15,000 to your lifetime exclusion.
👍 BONUS: If you’re married, you and your spouse are entitled to the $15,000 exclusion. So you could both give your granddaughter $15,000 (for that total of $30,000) and not hit your annual limit!
William Wombacher, your Central Illinois Certified Elder Law Attorney (CELA) and Social Security Disability Specialist. I’ll help you!
Call me at 309-674-8125, visit at www.wombacherlaw.com
Serving Peoria, East Peoria, Peoria Heights, Pekin, Dunlap, Chillicothe, Morton, Washington, Metamora, Canton, Galesburg, Lacon, Henry, Bloomington, Normal and surrounding cities and counties of Peoria, Tazewell, Woodford, Fulton and Knox Counties in Central Illinois.