Gift Tax Lawyer - Federal Lawyer

Gift Tax Lawyer

High net worth individuals stand to save a lot of money by planning their estate so as little of their wealth as possible goes through probate and as little as possible is subjected to state or federal taxation.

Making effective use of gift tax laws is one of the many tools at your disposal.

The tax lawyers at the national law firm Oberheiden P.C. have helped individuals across the country plan their estates in ways that ensure that as little as possible is lost to taxation and that most of their assets go to their intended beneficiaries.

How the Gift Tax Works

The gift tax is a tax on the transfer of money or other property from one person to another in exchange for nothing, or for an amount less than the full value of the property. Both the federal government has a gift tax, as well as many states. These taxes can apply to gifts or below market value sales of:

  • Money
  • Real estate or real property
  • Personal property, such as a car or jewelry
  • Right to the income generated from property, such as rental income from an apartment building or the dividends from a stock, bond, or other form of security
  • An interest-free loan

Importantly, it does not matter whether the person that is offering the transaction intends for it to be a gift or not. It is not uncommon for tax officials to re-characterize a transaction as a gift, even though you had no intention of it being one.

Depending on the value of the assets being gifted, the federal gift tax rate can be anywhere between 18 percent and 40 percent. In 2023, the rates were:

Taxable Value of GiftGift Tax Rate
$10,000 or less18%
$10,001 – $20,00020%
$20,001 – $40,00022%
$40,001 – $60,00024%
$60,001 – $80,00026%
$80,001 – $100,00028%
$100,001 – $150,00030%
$150,001 – $250,00032%
$250,001 – $500,00034%
$500,001 – $750,00037%
$750,001 – $1,000,00039%
$1,000,001 and over40%

These rates are marginal, not average, meaning that the tax increases as the value increases. For example, if the taxable value of a gift is $25,000, the whole gift would not be taxed at 22 percent for an amount of $5,500. Instead, the first $10,000 would be taxed at 18 percent ($1,800), the next $10,000 would be taxed at 20 percent ($2,000), while it would only the last $5,000 that would be taxed at 22 percent ($1,100), for a total of $4,900.

However, these rates only apply to the value of the gifts that are considered taxable. There are numerous exemptions and exclusions that you can make use of to reduce your taxable estate and maximize the amount that gets through to your intended beneficiaries.

Gifts that are taxable must be reported to the Internal Revenue Service (IRS) on Form 709.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Gift Tax Exclusion Limits Vary By Year

The federal tax code allows you to make gifts up to a certain amount without triggering the gift tax. These gifts are excluded from your taxable amount under the federal gift tax. There are two types of gift tax exclusions:

  1. Yearly exclusions
  2. Lifetime exclusions

Importantly, these exclusions are layered: If you exceed your yearly exclusion limit, you may still not owe gift taxes if you have not also exceeded your lifetime exclusion limit.

Note that this only applies to federal gift tax laws, though. States may have variations that should be accounted for when planning your estate.

Yearly Exclusions

The IRS lets you make gifts up to a certain amount in a calendar year to a beneficiary without triggering the federal gift tax.

In 2023, that annual exclusion is $17,000 per beneficiary, up from $16,000 in 2022.

Note that this is per beneficiary. If you have 17 people that you want to give money to, you could give each one of them up to $17,000 without triggering the federal gift tax for any of the transactions.

Like many federal tax laws, this exclusion is doubled for married couples. Married couples can give up to $34,000 in gifts in a calendar year to each beneficiary without triggering the federal gift tax.

However, even if you exceed your yearly exclusion amount, you will still generally avoid the imposition of the federal gift tax if you have not also exceeded your lifetime exclusion, though you would have to report it to the IRS.

Lifetime Exclusions

The IRS allows you to give away up to a certain amount in gifts over the course of your lifetime before they are subjected to the federal gift tax. In 2023, that amount is $12.92 million, up from $12.06 million in 2022. However, this amount is not per beneficiary – it is per benefactor.

Nevertheless, this number is still high enough that many solid earners never approach it, even if they routinely exceed their yearly gift tax exclusion. Like other tax exclusions, it also doubles for married couples.

Long-Term Use of the Gift Tax Exemptions Can Move Assets to Your Intended Beneficiaries

Using the gift tax wisely can allow you to move millions of dollars out of your hands and into the pockets of the people that you most want to have them without going through the expensive and time-consuming probate process. By picking up this tool early in the estate planning process, you can maximize its power and the reach of the applicable gift tax exclusions.

Some Frequently Asked Questions About Gift Taxes and the Services that Oberheiden P.C. Can Provide

What are Some Other Important Estate Planning Tools?

There are a wide number of different ways to get money and other assets out of your estate and to your beneficiaries in ways that minimize the tax liability and that ensure your beneficiaries can enjoy full and immediate use of them. In addition to using gift tax exclusions, a few others include:

  • Trust funds
  • Inter vivos transfers
  • Living trusts
  • Irrevocable trusts
  • Life insurance
  • Wills and testaments

Each of these tools presents a unique opportunity to get your assets into your beneficiaries’ hands in certain, specific situations. A tax and estate planning lawyer can help you come up with the best strategy for your particular needs.

Does the Gift Tax Law Change Often?

Yes, the federal gift tax has been the target of competing political interests in the past decade and so has changed significantly in the past few years.

Not only does the IRS frequently change the amount of the gift tax exclusions – it increased the amount of the lifetime gift tax exclusion by over 7 percent from 2022 to 2023 – but political maneuvering in Congress left a sunset provision in play that, without Congressional action, would reduce the lifetime gift tax exemption down to only $6.2 million at the end of 2025.

What Does it Mean for Oberheiden P.C. to Be a “National Law Firm”?

Oberheiden P.C. is a national law firm. We are headquartered in Dallas and Houston, Texas, but have law offices scattered across the country. No matter where you are, there is likely to be a representative from Oberheiden P.C. that can help you get the legal services that you need.

What Sets You Apart From Other Tax Law Firms?

Oberheiden P.C. is nearly unique among all business defense and tax law firms in that we only have senior lawyers and investigators on our staff. This means no junior associates or paralegals will do the bulk of the work on your case, because we do not employ junior associates or paralegals. It means that, when you call Oberheiden P.C., you speak directly with a senior lawyer who can answer your questions.

Other law firms, including many firms that handle estate planning and tax issues, draw clients in by touting the experience of their senior-most lawyers and partners, only to delegate the vast majority of the work on your case to inexperienced attorneys and paralegals. We think that the lawyers who do the work for you should be the same lawyers that attracted you to the firm in the first place.

Why Doesn’t Oberheiden P.C. Call Itself the Best Tax Law Firm?

That is the sort of thing that means far more when prior clients say it about Oberheiden P.C. Read their testimonials about what you can expect when you call the tax attorneys at our law office for your gift tax needs.


Estate Planning and Tax Lawyers at Oberheiden P.C.

Individuals who have lots of assets need to take precautions to ensure that what they have does not get eaten away by probate court and by state and federal inheritance taxes. There are numerous ways to do this, but none of them can do it all on their own.

Making use of the gift tax and its extensive exclusions is a great way to get a substantial amount of property to your beneficiaries almost wholly intact. However, it is essential to get started quickly if you want to make the most use of this important estate planning tool.

Call the tax lawyers at Oberheiden P.C. at (888) 680-1745 or contact them online to get their insightful estate planning strategies and figure out how to best proceed for your given situation and goals.

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