FTR TAX TIP OF THE MONTH
THE GIFT TAX ISN’T ALWAYS WHAT IT SEEMS!
SHAVED ASPARAGUS SALAD
Over the last couple months, I’ve talked to several clients who were worried about the gift tax and how it could affect the way they give to family members and friends. One particular client was worried that both he and his mother would be on the hook for the gift tax if his mother gave him more than $15,000 (the 2020 exclusion amount) in a given year. He’d talked to a financial planner and the planner had been quick to point out that any gifts over $15,000 per year, per person are taxable. That was a poor choice of words! The truth is that any gift over $15,000 MAY BE a taxable event for the donor, depending on individual facts and circumstances . Let’s say my client’s mother gave him a check for $50,000. In this example, there COULD BE a $35,000 taxable event (the sum exceeding the $15,000 exclusion amount), but that’s highly unlikely for most people, including my client. He wouldn’t have to pay a dime and neither would his mother. However, his mother would have to fill out a gift tax return (Form 709) to report the excess $35,000 gift. Why wouldn’t his mother have to pay? Well, she has a built-in buffer called the lifetime gift tax exemption. Let’s assume this was the first gift made by the mother during her lifetime over the current $15,000 exclusion. In my example, she will claim the $35,000 excess gift against her lifetime exemption ($11.58 million for 2020). After subtracting the gift ($11.58 million - $35,000), she will still have $11.545 million to use for future excess gift amounts or to use against her estate assets when she dies, before an estate tax is assessed. In my June FTR Tax Tip of the Month, I’ll explain what constitutes a gift and which categories of gifts are not actually treated as gifts if given correctly. If you have any questions about gifting in your particular circumstances, please reach out to me so I can help you make an informed choice. If you’re considering gifting over the yearly exclusion amount and are worried that you’ll have to pay tax, I’ll put your fears to rest!
Inspired by ACoupleCooks.com
• • • • •
1 lb asparagus spears 1 tbsp lemon juice 1 tsp Dijon mustard
• • •
1/2 tsp kosher salt
1/8 tsp red pepper flakes
Freshly ground black pepper, to taste
3 tbsp extra-virgin olive oil 3/4 cup Parmesan cheese, grated
1. With a vegetable peeler, shave each asparagus spear from tip to base. This is easiest to do if the asparagus is on a flat surface.
2. Place shaved asparagus in a bowl and blot off excess moisture with a paper towel.
3. In a separate bowl, make a vinaigrette by whisking together lemon juice, Dijon mustard, and olive oil.
4. Pour vinaigrette over shaved asparagus and add Parmesan cheese, salt, red pepper flakes, and black pepper. Toss to combine. Taste and adjust seasonings.
WWW.FRANCETICTAXRESOLUTION.COM | 262-752-6992
Made with FlippingBook - Online Brochure Maker