Does parental gift tax deduction apply to step-children after parent dies?
applies to ANYONE you make gifts to, not just your children. So now, for example, you and your husband could each make a $12,000 gift each year to each of his sons. That would be $24,000 for each son while he is alive. Or you could individually make a gift of $12,000 to each after he dies. You could also make a $12,000 gift to the your neighbor or other person who is nice to you! And just to clarify, what we are talking about here is referred to as a gift tax EXCLUSION (not a gift tax deduction). Even gifts that are not covered by the exclusion, and that are thus taxable, may not result in a tax liability. This is so because a tax credit wipes out the federal gift tax liability on the first taxable gifts that you make in your lifetime, up to $1 million. However, to the extent you use this credit against a gift tax liability, it reduces (or eliminates) the credit available for use against the federal estate tax at your death. I hope I didn’t complicate things even more for you. If you w
