The annual gift tax exclusion for the federal gift tax has increased to $12,000 for 2006. The annual exclusion had been $11,000. The annual exclusion is the amount any individual can give another individual per year without triggering a taxable gift for federal gift tax purposes.
Only gifts of present interests qualify for the annual exclusion. Any gifts in excess of the annual exclusion will use some of the donor’s lifetime exemption amount (currently $1,000,000) and could trigger federal gift tax if all of the lifetime exemption amount is used.
Louisiana allows the same annual exclusion as the federal gift tax so Louisiana’s annual exclusion will increase as well. However, Louisiana has a lifetime exemption of only $30,000, not $1,000,000.
For more information, please contact Kevin C. Curry.