Max out holiday gifts; exclusion limit will rise — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Max out holiday gifts; exclusion limit will rise

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Starting in 2006, taxpayers will be able to give cash gifts of up to $12,000 to each recipient without facing gift-tax issues. That's up from $11,000 this year. Married couples can give twice as much.

Strategy: Plan to give away even more assets starting next year. Whatever you transfer to your loved ones during your lifetime is removed from your taxable estate.

Example: If you have two children and five grandchildren, you and your spouse can together give each of them $22,000 this December and another $24,000 in January for a grand total of $322,000 ($46,000 times seven gift recipients). All of it is free from gift tax.

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