Tariff

Finance Allah Shmoop What is gift tax Of those I

Rs people They ruin everyone's fun You can't even give

away things anymore without it being taxed Even have some

t Khun spill into a harbor Boston gift tax party

Anyone know well so overly Simply as of two thousand

nineteen you're allowed to give about fifteen grand a year

with the expectation that this number will rise a bit

with inflation year after year And on that fifteen grand

or less there is no tax owed You have to

declare to the IRS people that you gifted but you

don't have to write them An incremental check and all

kinds of little tweaks to the definitions of givers and

receivers have made the state transfer easier in this country

For example of Family Khun Gift in multiple directions from

multiple sources like each year Mama Bear Khun Gift fifteen

grand to baby bear than fifteen grand too sulky teenager

texting bear then another fifteen grand Teo the Elder Bear

for a total of forty five grand gifted from Mama

Bear tax free Then Daddy Bear can do the same

for each kid and the elder such that they can

gift in one year ninety thousand dollars total in gifts

with no tax And there are other twists They aren't

limited to gifting Fax like they Khun gift art and

jewelry and mountain vats of honey or porridge or privately

appreciated stock like stock they bought for a dollar is

now trading at fifty and they can give fifteen grand

worth of that stock So Hugh may reasonably wonder how

they would determine the value of private stock if it's

not public or really any of the above None actively

traded and valued things like jewelry and stuff like that

Well there isn't a daily market for shares in private

companies or artwork or jewelry Usually So how do you

assess the value Well usually value is taken it whatever

the last round was invested at by professional investors of

its private stock even if it was five years ago

and the company has gone up a ton in value

But if it has well it's likely the company will

have been required to get a new four o nine

a valuation which is basically just a few high priced

lawyers assessing professionally what the company is worth based on

other similar companies that were sold or funded recently It's

the best guess of lawyers and accountants and the same

applies to appraisals of jewelry and art And like if

your parents are giving that stuff away to you too

willing to keep it under fifteen grand the arrest I

won't bug you So you can imagine that a family

wanted to transfer as much as they possibly could to

their kids Will The impetus could involve a whole lot

of downward pressure on valuations such that the fifteen grand

that was tax free gift herbal might really be worth

now something more like twenty grand or thirty grand or

maybe even fifty grand were it to sell that day

That is private valuations carry all kinds of risks The

gift ease as well Like if they want to sell

them like Mama thinks that jewelry a piece that was

made for her is really worth thirty four thousand dollars

And he's getting away with something stating It's only worth

fifteen But then baby there goes to try to sell

it on eBay and gets like three grand for it

Well may be discounting private things make sense The key

notion here is that fifteen grand of value can be

transferred tax free legally Happily the IRS has no tax

on that But above there there's all kinds of gift

tax right So what happens if Mama Bear gives baby

bear twenty thousand dollars in cash one year You know

Tio enable the baby or to buy a top of

the line Dr Braun's porridge warmer Well either Baby bear

can just pay income tax on the five thousand dollars

difference like fifteen grand was tax free and then five

thousand above that that five thousand above it is taxable

as a gift tax And in fact it's Mama Bear

who would technically be legally responsible for paying that tax

on the five grand But baby Bear can do it

if well you know if she wants or she can

write Mama bear a check for five grand back and

it's the net number that the IRS cares about There's

all kinds of other gift taxes the president's change them

limits and maximums all the time Currently a family Khun

Gift in about eleven million dollars in change with essentially

no estate tax when they died That protects the farms

in the Midwest from having to be sold When you

know great Grandpa Joe dies and he on the farm

for one hundred years That's how gift taxes air set

up And well if someone gives you a horse isn't

there a phrase about looking a gift horse in the

mouth You know be careful with those things by