Discounted Gift Giving
September 20, 2012 By Kuhn & Kuhn Law Firm
The Federal estate tax is unified with the gift tax.As a result,gifts that you give are subject to the same 35% tax that is applied to your estate. It should be noted that there is a unified gift/estate tax exemption and right now it sits at $5.12 million. However, these numbers are only accurate for 2012.As laws currently stand,the exclusion is going to be reduced to $1 million in 2013 and the rate is scheduled to rise to 55%.
One way that you could reduce your tax liability would be to give gifts at a tax discount.This can be done by creating a family limited partnership.If you give gifts of partnership shares to family members the taxable value of these gifts is discounted because as limited partners they would have no rights of control or marketability.
Another possibility would be to place your home into a qualified personal residence trust and make your children the beneficiaries.Funding the trust with the home is considered to be a taxable gift.But you continue living in the home after you create the trust for a period of time that you choose.
You retain interest in the home while you continue to live in it and its taxable value is significantly reduced as a result.
These are just two of the strategies that can be employed to gain tax efficiency.To learn more,simply take a moment to arrange for a consultation with a good South Carolina estate planning lawyer.
ABOUT THE AUTHOR: John Kuhn
Experienced estate planning attorneys Charleston NC of the Kuhn and Kuhn Law Firm offers estate planning and business planning resources to residents of Charleston, NC.
Copyright Kuhn & Kuhn Law Firm
More information about Kuhn & Kuhn Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Another possibility would be to place your home into a qualified personal residence trust and make your children the beneficiaries.Funding the trust with the home is considered to be a taxable gift.But you continue living in the home after you create the trust for a period of time that you choose.
You retain interest in the home while you continue to live in it and its taxable value is significantly reduced as a result.
These are just two of the strategies that can be employed to gain tax efficiency.To learn more,simply take a moment to arrange for a consultation with a good South Carolina estate planning lawyer.
ABOUT THE AUTHOR: John Kuhn
Experienced estate planning attorneys Charleston NC of the Kuhn and Kuhn Law Firm offers estate planning and business planning resources to residents of Charleston, NC.
Copyright Kuhn & Kuhn Law Firm
More information about Kuhn & Kuhn Law Firm
View all articles published by Kuhn & Kuhn Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
