There is a federal estate tax that was first enacted in 1916. This tax can be imposed on large asset transfers. When you think about the estate tax, a logical solution would naturally come to your mind. You could simply give assets to your loved ones while you are living to avoid the tax. Shortly after the estate tax was enacted, people did give gifts while they were living to sidestep the estate tax. However, a gift tax was enacted in 1924 to close this loophole. It was repealed in 1926, but it came back in 1932, and it has been in place since then. In 1976, the tax was unified with the federal estate tax. Everyone does not pay the gift tax and/or the estate tax, because there are exclusions. One of them is the unified lifetime gift and estate tax exclusion. The amount of this exclusion is $5.43 million in 2015, but there are annual adjustments to account for inflation, so you could see a slightly larger figure next year. Annual Gift Tax Exclusion There is an annual gift tax exclusio
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What Are the Gift Tax Exclusions?
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