Follow These Rules When Making Gifts

9:36 pm Estate Planning, Tax Planning

gift e1324076682161 Follow These Rules When Making GiftsThe timing of making year-end gifts is important because a transfer of property is only counted as a gift once a donor has unconditionally relinquished all control over it.  Here are the rules concerning gifts:

Gifts by Check – the check must be cashed or deposited into the recipient’s account by Dec. 31 to count as a 2012 gift, so if you have given a gift via check, be sure the recipient follows through by cashing or depositing the check before the end of 2012.

Gift of Securities – the securities must be physically transferred into the recipient’s account by year-end.

Large Gifts – gifts above the $13,000 annual exemption count toward your lifetime exemption, which is $5.12 million for 2012.  The gift exemption could potentially revert back to $1 million in 2013, so you should consult with a California estate planning attorney about the tax consequences of gifting more than $13,000.

Charitable Gifts – if you are making a donation by check, it must be mailed by Dec. 31.  If you are making a donation via credit card, you must also make it by Dec. 31, even though you will not pay for it until 2013.

Contact us today and let our Newport Beach law firm help you with all your financial planning needs.

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