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!
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