Gift tax law is mostly federal specific, but individuals in Texas who wish to better understand the rules, can gain knowledge by reading on and discussing their circumstances with a Texas tax professional such as an attorney or a CPA.
Texas Gift Taxes
Texas residents who have large estates will want to consider the federal tax implications of transferring parts of their estate and their entire estate both during life and at death. Tax law is complicated and an attorney or CPA should be involved in your considerations of how to manage your finances for the best tax consequences.
To better understand the gift tax, you must get some basic understanding of the estate tax. The estate tax is a tax on the transfer of wealth from one generation to another at death. If you leave money behind or assets behind at death, it will be taxed when it is transferred to your heirs or beneficiaries.
The gift tax is a tax on the transfer of wealth from one generation to another when the transfer is made during life. The gift tax is a tax imposed on any gifts that you make during their lifetime, unless they fall within the annual exemption..
The estate tax is different from income tax. Income tax is imposed on any income you generate during your life, whereas the estate tax is imposed on the value of your assets at the time of death.
You are entitled to a gift tax exemption, which is currently $1 million dollars over your lifetime. There is also an annual exemption to which you are entitled which, as of 2010, is $13,000 per year, per individual. You can also give money to assist with tuition and medical bills of your family or loved ones in most cases without suffering gift tax consequences. You can gift anything you wish to your spouse without triggering the gift tax.
Getting Legal Advice
Tax considerations in estate planning are complex. That is why discussing your case with an estate planning or tax attorney will prove helpful. Also, each persons situation is unique, and an attorney can help assess the law and your financial affairs. An experienced attorney will guide you through any complex legal issues or tax questions with care and help you get the best possible result out of any tax situation.