What the 2023 Gift Tax Exclusion Increase Means

2023 Gift Tax Exclusion Increased

THE 2023 GIFT TAX EXCLUSION IS NOW $17,000

The limit for a “Tax-Free” gift in 2023 is now increased to $17,000. This means that both parents can gift up to $17,000 to each of their children without having to pay the Gift Tax. In addition, they can gift $17,000 to their married children’s spouses without paying taxes. You can learn more about the Gift Tax Exclusion at Kiplinger by CLICKING HERE.

DOWNPAYMENT ASSISTANCE

Assume a mother and father of an adult married child both gift the maximum. The total value of the net gifted amount to the younger couple would be $68,000. A gift of this size can go a long way towards helping the couple put a down payment on a new home.

INCREASING THE VALUE OF YOUR GIFT

$68,000 can go a long way towards funding the downpayment on a new home. And in this manner, the parents can actually see their children make good use of an inheritance while they are still around. Additionally, if used as a downpayment on property, the gift allows the children to tap into equity that will likely grow in value over time. So the initial $68,000 bestowment can significantly increase in value over time.

Furthermore, whether the younger couple plans to pay back their parents or not, the gifted amount is not a loan. That means their credit score also is not negatively impacted.

DON’T MISS OUT ON CURRENT PRICE REDUCTIONS

Because of these factors, the increase in the Gift Tax Exclusion is another reason to consider purchasing property now. You can take advantage of lower prices. And, you can maximize the benefit of funds you were already planning to give to your children.

WE CAN HELP

If you would like to see how a gift could impact your children’s ability to purchase a home, contact us at Sound Investments by CLICKING HERE. We can calculate different scenarios and show you how much your initial gift can grow in value over time.