Can Form 3520 Columns 2023-2024

Hi Lee Phillips, here. I want to talk to you about a term called the annual exclusion. It's a tax principle that refers to gift tax. People typically don't worry about gift tax, but in some cases it can be a concern. The government has stated that if the gift amount is just a little bit, they won't worry about it. For example, frequent flyer miles were talked about as potentially being taxed as income, but they decided not to worry about it. This concept of not worrying about small amounts is referred to as de minimis in the gift tax realm. The government wants to tax money or property that is given as gifts, as a way to prevent wealthy individuals from giving away their estate and avoiding taxation. This is why they charge a gift tax. Additionally, when you pass away, there is an estate tax that needs to be paid. The gift tax and the estate tax are unified into one, known as unified taxes. In 2013, the amount you could give away without being subject to federal estate tax was 5 million. Since then, the amount has been increasing. However, it's important to check the annual exclusion amount each year, as it changes slightly. Currently, the amount is around 14,000 dollars. The annual exclusion refers to the maximum gift amount that can be given to someone without having to file a gift tax return or worry about any related issues. It's considered insignificant and not something to be concerned about. Remember to verify the specific annual exclusion amount for the year. When giving a gift, it's important to note that the recipient doesn't need to pay any tax on it. It doesn't count as income for them. Occasionally, the IRS may question larger gifts and inquire if additional gifts were...