Gift taxes are taxes that supplement the Estate Tax. Gift taxes are placed on gifts given away to any person while you are still living, so that you may not avoid estate taxes by making gifts of your estate. You may give up to $12,000 a year in cash or assets to an unlimited number of people each year without incurring gift tax liability, but the gifts must have no conditions attached. Married couples can give, as a couple, a $24,000 gift per year to as many people as they want. Under federal tax law, gifts totaling more than $12,000 to one person in one year are considered a taxable gift and generate a potential gift tax. It does not matter if you give one $13,000 gift or 13 gifts of $1,000 each, or one gift of $12,000 and a "birthday gift" of $1,000.
Gifts beyond the $12,000 limit (there is an exception for gifts that are directly paid by the gift giver for tuition and medical expenses) are considered "taxable gifts." Taxable gifts create liability for a gift tax. But gift tax is not due to be paid until you give away over $1,000,000 in your lifetime.
The New Mexico Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse is a legal document that facilitates the gifting of cash over a specified period of time, typically to a charitable organization or individual. In this declaration, the donor outlines the terms and conditions of the gift, including the timeline for disbursing the cash and the portion that will be split with their spouse. This type of declaration is often used by individuals or couples who wish to make a substantial donation to a charity or organization, but prefer to stagger the gift over several years for financial planning purposes. By splitting the gift with their spouse, they can take advantage of joint tax benefits and maximize the impact of their contribution. The New Mexico Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse can have various types, depending on the specific circumstances of the donation and the preferences of the donor: 1. Irrevocable Declaration of Gift: This type of declaration is permanent and cannot be changed once it is executed. It ensures that the gift is legally binding and cannot be altered or revoked by the donor. 2. Revocable Declaration of Gift: Unlike the irrevocable declaration, the revocable declaration allows the donor to make changes or revoke the gift at any time during the specified period. This type of declaration provides more flexibility for the donor. 3. Designated Charity Declaration of Gift: This type of declaration is specifically tailored for donors who wish to donate cash to a particular charity or organization. The declaration outlines the exact amount and timeline for the gift, as well as any provisions for the splitting of the gift with the spouse. 4. Donor-Advised Fund Declaration of Gift: Sometimes, donors prefer to establish a donor-advised fund, which is a charitable account managed by a public charity or financial institution. With this type of declaration, the donor contributes cash to the fund and retains advisory privileges over how the funds are distributed to charitable organizations. The declaration includes the terms and conditions of the gift, as well as provisions for splitting the gift with the spouse. 5. Family Foundation Declaration of Gift: For donors interested in creating a family foundation to manage and distribute their gifts, this type of declaration is used. It allows the donor to establish a foundation and donate cash over a period of years, with provisions for splitting the gift with the spouse. The declaration outlines the governance and operational details of the foundation, along with the terms of the gift. Overall, the New Mexico Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse provides a legal framework for individuals or couples to make substantial gifts over time while considering their financial and charitable goals. It helps ensure that the donation process is legally binding, transparent, and aligned with the donors' intentions and preferences.
