Gifting Down Payments

 

Even if tax applies to your gifts or your estate, it may be eliminated by the unified credit.

A credit is an amount that reduces or eliminates tax. A unified credit applies to both the gift tax and the estate tax. You must subtract the unified credit from any gift tax that you owe. Any unified credit you use against your gift tax in 1 year reduces the amount of credit that you can use against your gift tax in a later year. The total amount used during life against your gift tax reduces the credit available to use against your estate tax. The unified credit against taxable gifts remains at $345,800 (exempting $1 million from tax) through 2009, while the unified credit against estate tax increases during the same period.  As with all tax information please consult with a qualified tax professional to understand how these rules apply to your situation.  In addition, you may also read IRS Pub 950