Music, hi there! I'm Paul Sapega, one of the partners at Your Daily Pope, and I'm here to talk to you about gift taxes. We all know about income taxes and estate taxes, but there's also something called a gift tax, and in Connecticut, we are the only state in the country that has a gift tax. Lucky us! Let's talk about the state gift tax and the federal gift tax. First, let's cover the basics. Small gifts are not a concern for anyone, especially when dealing with the federal government. In the state of Connecticut, their idea of small gifts is slightly larger than ours. Perhaps their idea of small gifts is $14,000 or less. This could be a gift of cash, stocks, or even a car given to a child upon graduation. Gifts of $14,000 or less are not counted, and nobody really cares about them. So, we are all allowed to make a gift of $14,000 or less to anyone we want each year, and there's no gift tax reporting requirement. However, there's one little catch to that. If, for example, you said, "I'm going to put $10,000 or $14,000, whatever the amount is, into a trust for my grandchild, and they'll get it when they're 35," that is a taxable gift according to the state of Connecticut and the IRS. They will be concerned about that because if you want to take advantage of the exemption, the $14,000 limit, the person receiving the gift has to have a present interest. They should have the right to take the money then and there and do what they want with it. If you make a gift to a grandchild in a trust, and they have no immediate right to the money and can't access it until they're 35,...
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