Before the end of the year, take advantage of what is known as the annual gift-tax exclusion. This allows you to give up to $15,000 a year to each of any number of recipients. It allows $30,000 a year to each recipient if your spouse joins in the gift. The exclusion is an annual one – use it or lose it!
Transferring assets to your children or to parents you’re supporting may result in an income tax savings if the recipients are in a lower tax bracket than you. How? Assuming the gift was earning interest, the interest will now be taxed at the receiver’s rate and will be paid by the receiver.