Year End Gift Checks – make sure you do it right
Many people are aware that they can give any number of other people up to $13,000 per year under the federal gift tax annual exclusion (IRC Section 2503(b)). Staying under this number means that no gift tax return has to be filed and that there will be no reduction in the amount that can be passed free of estate taxes at the donor’s death.
- The check was paid by the drawee bank when first presented for payment;
- The donor was alive when the check was paid by the drawee bank;
- The donor intended to make a gift and delivery of the check was unconditional; and
- The check was deposited, cashed or presented in the year for which completed gift treatment is sought and within a reasonable time after issuance.