Tax Avoidance Through Gifting

There are a few key things to keep in mind when gifting to minimize the amount of taxes you might have to pay. The first is to make sure that you gift to individuals rather than to organizations. You can also give gifts of up to $15,000 per person without having to pay any taxes on the gift. And, if you are giving a gift to a spouse or a charity, you can do so without having to pay any taxes. However, if you exceed the $15,000 limit, you will have to pay taxes on the amount that exceeds that limit.

Another thing to keep in mind is that you can only gift property that you own. You cannot gift property that you are merely borrowing or that is subject to a mortgage or other lien. In addition, you cannot gift property that is subject to a legal restriction on its sale.

There are a few other things to keep in mind when gifting to minimize the amount of taxes you might have to pay. For example, you can gift appreciated property without having to pay any taxes on the gain. And, you can also gift property that you have held for more than a year. This is known as a “long-term capital gain” and it is subject to a lower tax rate than ordinary income.

Gifting property that you have held for less than a year is subject to a higher tax rate. However, there is a way to avoid this higher tax rate. You can elect to have the gain treated as if you had held the property for a year. This is known as “mark-to-market” treatment and it allows you to take advantage of the lower tax rate that applies to long-term capital gains.

To take advantage of mark-to-market treatment, you must file IRS Form 4797. This form must be filed even if you do not sell the property. You must also file this form if the property is sold within a year of the gift.

There are a few other things to keep in mind when gifting to minimize the amount of taxes you might have to pay. For example, you can gift property that you have held for more than a year. This is known as a “long-term capital gain” and it is subject to a lower tax rate than ordinary income.

Gifting property that you have held for less than a year is subject to a higher tax rate. However, there is a way to avoid this higher tax rate. You can elect to have the gain treated as if you had held the property for a year. This is known as “mark-to-market” treatment and it allows you to take advantage of the lower tax rate that applies to long-term capital gains.

To take advantage of mark-to-market treatment, you must file IRS Form 4797. This form must be filed even if you do not sell the property. You must also file this form if the property is sold within a year of the gift.