How to avoid gift tax when giving or receiving money

Estate & Tax Attorney, Stefanie Lipson, shares advice on how to avoid gift taxes when giving or receiving money
How To Avoid Gift Tax When Giving Or Receiving Money
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How to avoid gift tax when giving or receiving money

The gift tax is a federal transfer tax that is imposed when you transfer property during your lifetime. There is a different tax – the estate tax – which is imposed when you transfer property to your beneficiaries at death. Generally speaking, the donor, the person who is making the gift, pays gift tax on what the donee, the recipient, gets. So the amount that the recipient gets is not reduced by the amount of gift tax that has to be paid. Now before you ever get to paying a gift tax, every individual has the ability to make gifts of up to 13 000 dollars a year to as many different individuals as they want without being subject to the gift tax rules. In addition, each individual has a credit against the gift tax and against the estate tax, which can either be used during lifetime to shelter gifts from gift tax, or can be used at death to shelter assets from estate tax at death But what you use during lifetime, you can no longer use at death – so it’s either or. Currently, in 2011 as the law stands, each individual can transfer up to 5 million dollars without having to pay a gift tax before, then they have to pay tax out of pocket. But again, if you use the 5 million dollars during lifetime, then everything that passes at your death would be a subject to estate tax. That amount is said to go up in 2012 under current law to 5.12 million, but is going to be reduced in 2013 under the current law to 1 million dollars. There’ a lot of uncertainty surrounding what the gift and estate laws are right now, part of that being the extension of the Bush tax cuts that occurred in 2010 and the budget crisis that’s currently going on in 2011. So we’re waiting to see how the gift tax laws play out and how much the gift tax credit is going to be.

Estate & Tax Attorney, Stefanie Lipson, shares advice on how to avoid gift taxes when giving or receiving money


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Stefanie Lipson

Estate & Tax Attorney

Stefanie J. Lipson is an attorney in the Family Wealth Planning Group of Greenberg, Glusker, Fields, Claman, & Machtinger, LLP.  Stefanie’s practice focuses on comprehensive estate planning for high net worth individuals, family business succession planning, probate and trust administration and the law of tax exempt organizations.  Stefanie counsels her clients with a holistic approach to wealth transfer solutions, structuring plans to meet a family’s individual needs while addressing the complex estate, gift and income tax implications of wealth transfer.  In addition, consistent with Stefanie’s belief that the most effective estate planning begins early, Stefanie has developed an estate planning program designed specifically to meet the planning needs of young families as they encounter common life events. 

Stefanie’s unique approach and application of Trust and Estate law has been well acknowledged by the legal community.  She served as a panelist at the 2010 Southern California Tax and Estate Planning Forum in a discussion involving multijurisdictional issues in estate planning and has authored publications for The Los Angeles Daily Journal and The Recorder.  Stefanie has been listed in Southern California Rising Stars each year since 2009.

Stefanie received her Bachelor of Arts in 2003 from University of California Los Angeles, graduating magna cum laude with the distinction of departmental honors and a member of Phi Beta Kappa.  Stefanie received her J.D. from the University of Southern California Law Center in 2006.  Following her graduation from USC, Stefanie clerked for the Honorable Fred Keiser, Jr. in the New Jersey Superior Court, Family Law Division.  During her time with the court, Stefanie also served as a court appointed mediator for small claims civil matters. 

In furtherance of her estate planning work, Stefanie is currently pursuing a Master of Laws in Taxation (LL.M.) from New York University School of Law.  Stefanie’s studies at NYU focus on estate, gift and income tax matters relating to wealth succession planning and family business ownership.

Stefanie lives in Los Angeles, with her husband Marc and their new son Noah, whom she regards as her greatest achievement.

Guardianship, Wills and Trusts
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