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Tax Services > Annual & Lifetime Exemptions

Annual & Lifetime Exemptions

What are Annual & Lifetime Exemptions?

The Annual “Gift Tax” Exemption is the amount an individual may gift away per person, per year, while keeping that gift tax-free. For tax year 2019, the Annual Gift Tax Exemption is $15,000.  

The Lifetime “Gift Tax” Exemption is the total amount an individual may gift away over the course of that person’s life that will be free from taxation. Starting in 2018, the Lifetime Gift Tax Exemption is $11.18 MM. 

What are the advantages of Annual Gift Tax Exemptions & Lifetime Gift Tax Exemptions?

Individuals may transfer cash or assets to others without being taxed, as long as that transfer per year per individual is less than the annual limit of $15,000. Thus, the primary advantage is the tax-free transfer of wealth. It is important to note that any amount of annual gift exceeding $15,000 will be deduction from one’s Lifetime Gift Tax Exemptions. For example, each $15,000 tax-exempt gift is subtracted from the Lifetime Gift Tax Exemptions of $11.18 MM). This means that the value of one’s Estate that is exempt from the Estate Tax will be reduced for each tax-exempt gift.  

Who qualifies & why should you adopt?

Any individual wishing to transfer assets to any party should adopt this tax-friendly strategy. 

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