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’Tis Better to Give Than Receive

Background: Under the annual gift-tax exclusion, you can give any person up to $12,000 each year without paying any federal gift tax. This exclusion is doubled to $24,000 if your spouse joins in the gift. In other words, if you have three children, you could give each one $24,000 free of gift tax. That adds up to a total of $72,000 in gifts with no gift- tax liability.

Also, you can spread out gifts over a few years if it suits your interests. For example, you can give $12,000 to a family member in December and another $12,000 to the same person in January. Remember that the gift-tax break is an annual exclusion.

Finally, amounts paid for another person’s medical expenses or tuition do not count towards the exclusion if the money is paid directly to the health care provider or educational institution.

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