![\"how](\"https:\/\/i.imgur.com\/vtZQnGI.jpg\")
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Uncle Sam might tax your 401(k) or even your dividends, but there is a good chance he won\u2019t take a cut of that $100 bill you slipped into your teenage son\u2019s birthday card or the $650 washing machine you bought for a friend in need. In fact, you can give away quite a bit of money or property without the IRS noticing\u2014provided you stay within certain gift-tax limits, which are called annual exemption limits. The current annual exemption limit is $17,000 per recipient in 2023, and spouses can share the exclusion amount, meaning you and your partner can give up to $34,000 to each other and to individual recipients each year Noti7<\/strong><\/a>.<\/p>\n It\u2019s important to note, however, that you must file a gift tax return for any gifts above this limit. It\u2019s a civil obligation to let the IRS know, and failing to do so can result in penalties.<\/p>\n In general, the IRS looks at a number of things when determining whether something qualifies as a taxable gift. One of the most important considerations is fair market value, which is what the item would sell for on the open market. The IRS can also consider a gift any time you transfer ownership of an asset to someone else, which is why setting up revocable trusts can be such a smart move.<\/p>\n The good news is that the current lifetime exemption is set to double in 2023, so most people won\u2019t run afoul of this rule any time soon. But it\u2019s always a good idea to keep track of the value of the assets you\u2019re giving away, especially if they are appreciated assets.<\/p>\n There are also some items that don\u2019t qualify as a gift, such as interest-free loans or forgiving debts. Basically, any loan you make that you don\u2019t expect to get paid back is considered a gift by the IRS.<\/p>\n Another reason to keep track of the value of your gifts is that if you give more than the exclusion amount in a single year, the excess must be reported on a gift tax return, and it will lower your lifetime exclusion limit. If you\u2019re planning to give away a large sum in the future, this could be a big issue to consider.<\/p>\n","protected":false},"excerpt":{"rendered":" Uncle Sam might tax your 401(k) or even your dividends, but there is a good chance he won\u2019t take a cut of that $100 bill you slipped into your teenage son\u2019s birthday card or the $650 washing machine you bought for a friend in need. In fact, you can give away quite a bit of […]<\/p>\n","protected":false},"author":1,"featured_media":330,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":["post-328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-garden-table-lamp"],"_links":{"self":[{"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/posts\/328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/comments?post=328"}],"version-history":[{"count":3,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/posts\/328\/revisions"}],"predecessor-version":[{"id":546,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/posts\/328\/revisions\/546"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/media\/330"}],"wp:attachment":[{"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/media?parent=328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/categories?post=328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.njfightshop.com\/index.php\/wp-json\/wp\/v2\/tags?post=328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}