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How much can you give this holiday without paying the gift tax?

Thinking of making someone's Christmas merry and bright by offering to cover some bills, gifting them with a large amount of cash or transferring ownership of stock or investment accounts? While it's good to help loved ones during the holidays or use their own wealth to surprise and delight someone else, you should be aware of possible gift tax concerns.

If you give over a certain amount each year to another person, you could end up owing a big chunk to the Internal Revenue Service. You might also put the recipient of the gift in a position where tax burdens are an issue. To avoid this type of problem, talk to your estate attorney or financial adviser before you gift large amounts of cash or cash-equivalent items to another person.

As of 2016, you are allowed to give each person up to $14,000 without incurring the gift tax. You can give that amount to as many people that you want to, and you can also give to charitable organizations or your own spouse in greater amounts without paying the gift tax. Some lifetime limits do exist for giving, so if you've been very charitable in the past, consult with your lawyer before repeating it this year to find out where you stand with taxes and your estate.

Gifting now can be a good estate-planning tactic. It lets you ensure your loved ones are cared for and receive wealth you want to pass on eventually, but it also lets you slowly reduce or maintain the value of your estate so that it isn't hit with 40 percent federal taxes when you pass away.

Source: Bankrate, "Estate and gift tax exemptions for 2015-2016," accessed Dec. 16, 2016

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