This week I’m talking about the 2020 gift tax rules, and how you can take advantage of lifetime gift strategies while these options are still on the table. 

Gifting, especially during your lifetime, can be a powerful strategy to transfer wealth, business interests, property, and a variety of other assets to your family and heirs, and with the current generous gifting and estate tax rules, now is the time to gift. 

Today, I’m talking about the lifetime gift tax exemption, which is where the real benefit of gifting lies. 

You can gift up to $15,000 per gift recipient in 2020 without paying taxes and up to $30,000 per gift recipient if your married, which is what I covered yesterday. But what happens if you want to gift more than that?

You can actually give substantially more to your heirs without being subject to tax. The additional gift will just be applied to your lifetime exemption. 

Let’s say you own a family business worth $3 million dollars. Would you be shocked to learn that you can actually gift that business to your children during your lifetime without paying tax on that gift? 

That’s because of the lifetime gift tax exemption, which is currently $11.58 million in 2020. This means that you can give up to $11.58 million in gifts over the course of your lifetime without ever having to pay gift tax on it. And if you are married, it’s double that amount. You and your spouse can give away a total of $23.16 million before paying the gift tax.

As I’ve stated before, Democrat lawmakers are not big fans of the current gift and estate taxes, so if Trump loses in November, the clock may be ticking on you being able to take advantage of the current gift tax rules and these rules may be repealed sooner rather than later. 

Keep in mind though that if you have substantial wealth or assets to transfer, you want to do it before the rules change and not wait, because the IRS has stated that there will be no clawback on these lifetime gifts. Which means that you can now transfer tens of millions of dollars of your estate - gift tax free, without fearing that those gifts will later be taxed.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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