What is the Gift Tax exemption?

Harry (Guest) on Wednesday, November 14 2012, 09:36 AM
We are working on our estate planning. I'd like to know if there is a Federal or MA state gift tax exemption. Would you please explain how we can gift to our grandchildren with this tax benefit?
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    Replied by Attorney Margaret Cross-Beliveau on Monday, November 19 2012, 11:22 AM · Hide · #1
    There is only a Federal Gift Tax; Massachusetts does not impose a transfer tax on gifts. Every U.S. Citizen has a cumulative lifetime gifting exemption that was $1,000,000 up until the passage of the recent tax law which increased it to $5,000,000 (but this may only be until the end of 2013). Additionally, every person has an annual gift tax exclusion of $13,000. Gifts do, however, have an effect on the Massachusetts Estate Tax. Furthermore, gifts to grandchildren carry an additional problem at the Federal level due to the Generation-Skipping Transfer Tax. A comprehensive review of a persons estate plan should be performed you are giving substantial gifts.
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