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Gift Taxes Generally

In many ways Gift Taxes and Estate Taxes go hand-in-hand. Much like Estate Taxes, Gift Taxes vary from state to state and also vary between the state and federal levels. Gift Taxes are imposed on the Donor of a gift and the recipient of a gift must report it as Income Tax. Additionally, it is important to note that not all gifts are taxable. For example, gifts that are below the exclusion limit for that year, gifts to charities and political organizations, and gifts to spouses who are United States Citizens are not taxable as Income Tax. However, the Federal Estate Tax exclusion amount is deducted by the amount of living gifts that the decedent made during their lifetime. This is a very important consideration for estate planners as it helps determine an estate's tax exposure.

Federal Gift Taxes Exclusion Limit

The exclusion amount for Federal Gift Taxes may at some point be changed, but it currently stands as an annual amount of $13,000 per individual or organization. This means that you may gift $13,000 to as many different people and organizations as you would like, annually, without incurring any Federal Gift Tax up to the Estate Tax exemption limit in order to be non-taxable. In addition, a married couple may join their annual gift exemptions to allow for a non-taxable gift of $26,000 each year.

Virginia Gift Taxes

There is no Virginia Gift Tax. The 2006 General Assembly House Bill 5018 repealed the state Estate Tax in the Commonwealth of Virginia for estates of decedents whose date of death was on or after July 1, 2007. This repeal also repealed the state Gift Taxes in the Commonwealth of Virginia.

The attorneys at McClanahan Powers principally service Virginia and Washington D.C., however they are experienced in constructing estate plans in other states and are pleased to assist clients who inquire about designing their estate plans in other states.

Contact a Will and Trust Attorney at McClanahan Powers to see if you qualify for a free Initial Consultation

To receive world-class service for your legal matter, call a Will and Trust Attorney at McClanahan Powers at 703-520-1326. Or, to send an e-mail, please complete and submit the online form on this website. Flexible appointment times and payment options are available.