"Annual gift tax exclusion: $19,000 per person in 2025 ($38,000 for couples). Lifetime gift and estate tax exemption: $13.99 million in 2025, but expected to drop in 2026. Inheritance advantage: Stepped-up basis often saves heirs from significant capital gains taxes. Trusts and spousal transfers: Effective tools for transferring property when dealing with larger estates or married couples. Gifting a property to a loved one can feel like a generous way to pass on wealth, but the stringent regulations"
"and tax consequences of doing so are often overlooked. There are several strategies to avoid gift tax on property, but each comes with trade-offs that can have lasting financial effects. In this Redfin real estate guide, we'll explore what strategies exist to minimize tax liability. So whether you're looking to transfer ownership of your home in Birmingham, AL, to your spouse, or maybe"
"What is the gift tax? The gift tax is a federal tax applied to transfers of money or property from one person to another without receiving equal value in return. Unlike , it is paid by the giver, not the recipient. Who it applies to: U.S. citizens and residents who transfer assets above the annual or lifetime exemption thresholds. When it applies: Only when gifts exceed the annual exclusion amount or when lifetime transfers surpass the federal estate tax exemption. What counts as a gift: Real estate, cash, cars, jewelry, stocks, and even forgiving a loan."
The federal gift tax applies to transfers of money or property made without receiving equal value, and the donor normally pays the tax. Annual per-recipient exclusions allow tax-free gifts up to $19,000 in 2025 ($38,000 for couples). A lifetime gift and estate tax exemption of $13.99 million exists in 2025 but is expected to decline in 2026. Stepped-up basis at inheritance often shields heirs from capital gains on property appreciated during the giver's lifetime. Trusts, spousal transfers, and other estate-planning tools can reduce taxable transfers but carry trade-offs that affect control, tax basis, and long-term financial outcomes.
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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