on your death. Because the credit applies against both the gift tax and the estate tax, it's called a "unified credit."

For years 2002 through 2009, the gift tax unified credit is $345,800. That translates into a gift of $1,000,000 before any gift taxes are actually paid.

That being the case, why do you have to file a gift tax return

In an earlier article, we discussed the annual gift tax exclusion and how it works. In summary, we said that you could give up to $12,000 in cash or property to any one person during 2006 and not have to pay a federal gift tax. In fact, you don't even have to file a gift tax return. This is not the result of a kind and benevolent federal government at work. Rather, it is simply an effort to avoid an administrative nightmare keeping track of nominal gifts for weddings, birthdays, holidays, etc. Can you image having to file a gift tax return every time you took a bottle of wine over to your neighbors' for dinner?

So, the annual gift tax exclusion exists purely for administrative reasons. But, what happens if you exceed that exclusion amount during 2006 or any other year? What if, for example, you give your son or daughter $20,000 as a down-payment on a house?

In that case, you are required to file a federal gift tax return (Form 709) for the year of the gift. The return is required by April 15th of the following year, just like your personal income tax return (Form 1040). For 2006, the gift tax return would have to be filed by April 15, 2007.

However, that does not mean that you will actually pay a gift tax, because the tax laws give you a credit that can be applied against any gift taxes incurred during your lifetime and any estate taxes incurred upon your death. Because the credit applies against both the gift tax and the estate tax, it's called a "unified credit."

For years 2002 through 2009, the gift tax unified credit is $345,800. That translates into a gift of $1,000,000 before any gift taxes are actually paid.

That being the case, why do you have to file a gift tax return

ent at work. Rather, it is simply an effort to avoid an administrative nightmare keeping track of nominal gifts for weddings, birthdays, holidays, etc. Can you image having to file a gift tax return every time you took a bottle of wine over to your neighbors' for dinner?

So, the annual gift tax exclusion exists purely for administrative reasons. But, what happens if you exceed that exclusion amount during 2006 or any other year? What if, for example, you give your son or daughter $20,000 as a down-payment on a house?

In that case, you are required to file a federal gift tax return (Form 709) for the year of the gift. The return is required by April 15th of the following year, just like your personal income tax return (Form 1040). For 2006, the gift tax return would have to be filed by April 15, 2007.

However, that does not mean that you will actually pay a gift tax, because the tax laws give you a credit that can be applied against any gift taxes incurred during your lifetime and any estate taxes incurred upon your death. Because the credit applies against both the gift tax and the estate tax, it's called a "unified credit."

For years 2002 through 2009, the gift tax unified credit is $345,800. That translates into a gift of $1,000,000 before any gift taxes are actually paid.

That being the case, why do you have to file a gift tax return

asons. But, what happens if you exceed that exclusion amount during 2006 or any other year? What if, for example, you give your son or daughter $20,000 as a down-payment on a house?

In that case, you are required to file a federal gift tax return (Form 709) for the year of the gift. The return is required by April 15th of the following year, just like your personal income tax return (Form 1040). For 2006, the gift tax return would have to be filed by April 15, 2007.

However, that does not mean that you will actually pay a gift tax, because the tax laws give you a credit that can be applied against any gift taxes incurred during your lifetime and any estate taxes incurred upon your death. Because the credit applies against both the gift tax and the estate tax, it's called a "unified credit."

For years 2002 through 2009, the gift tax unified credit is $345,800. That translates into a gift of $1,000,000 before any gift taxes are actually paid.

That being the case, why do you have to file a gift tax return

HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.atriclecheck.com/article/119375/atriclecheck-What-Happens-If-You-Give-More-Than-12000-To-Someone-in-2006.html">What Happens If You Give More Than $12,000 To Someone in 2006?</a>

BB link (for phorums):
[url=http://www.atriclecheck.com/article/119375/atriclecheck-What-Happens-If-You-Give-More-Than-12000-To-Someone-in-2006.html]What Happens If You Give More Than $12,000 To Someone in 2006?[/url]

Related Articles:

The Franchise Restaurant Business - Ups and Downs

It's really not hard to figure out which franchises are the most successful. You see them advertised on television and on billboards, hear them advertised on the radio, and cannot drive through a shopping center anywhere in the US without passing one or more of them.

Mortgage Protection Leads

Lead-source companies employ a variety of marketing strategies to gain mortgage leads or information on potential clientele, one of which is mortgage protection leads. Mortgage leads are available through various means, and the easiest as well as commonest way to obtain these leads is through the Internet. Usually, the companies searching for mortgage protection leads are interested only in clients who are willing to purchase their loan. By utilizing a mortgage protection lead, a businessman can establish a good relationship with his customers.

Personal Loan - A Boon to Fulfill Your Needs

Personal loan is designed for personal needs and desires of an individual. We usually take loan when we fall short of money and it becomes hard to meet all our desires & needs.

Bookmark it: