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.
Texas Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse is a legal document that allows individuals in Texas to make gifts of cash over a specified period of time while also splitting the gift with their spouse. This declaration enables individuals to transfer substantial amounts of money to their loved ones while taking advantage of certain tax benefits. The primary purpose of the Texas Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse is to facilitate asset transfers and reduce potential tax burdens imposed by gift taxes or estate taxes. By utilizing this declaration, individuals can ensure that their financial assets are distributed according to their wishes while minimizing the tax implications associated with large cash gifts. Splitting the gift with a spouse allows the donors to utilize both their own and their spouse's annual exclusion amount for gift tax purposes. In Texas, the annual exclusion amount is currently $15,000 per person, which means that an individual can gift up to $30,000 to another person per year without invoking any gift tax. By splitting the gift with their spouse, the total amount exempt from gift tax doubles to $60,000. There are various types of Texas Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse, including: 1. Irrevocable Declaration of Gift: This type of declaration establishes a legally binding commitment to transfer a specified amount of cash over a predetermined period of time. Once executed, the declaration cannot be revoked or altered unless certain conditions are met. 2. Revocable Declaration of Gift: Unlike the irrevocable declaration, this type of declaration allows the donor to modify or revoke the gift at any time. This flexibility provides individuals with more control over their assets, although it may not offer the same tax advantages as an irrevocable declaration. 3. Charitable Gift with Splitting: This specific type of declaration is used for individuals who wish to make charitable contributions while also splitting the gift with their spouse. By doing so, donors can support their preferred charities while maximizing the tax benefits associated with charitable giving. 4. Business Gift with Splitting: Some individuals may choose to make gifts of cash to their business partners or colleagues while splitting the gift with their spouse. This type of declaration helps individuals share financial assets with their professional contacts while minimizing tax liabilities. In summary, the Texas Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse enables individuals to make substantial gifts of cash over time, while also utilizing the annual gift tax exclusion amount through splitting with their spouse. The content provided above gives an overview of this legal document, its purpose, and the different types that can be utilized to meet specific financial objectives.
