The Gift Tax: Use It or Lose It

Make people happy while you're still around to hear "thank you"...

Giving gifts to family and friends during your lifetime permanently removes money or other assets from your estate, reducing any future estate tax. Under current law, only the wealthiest Americans need to worry about the federal estate tax, but those limits expire at the end of 2012. So even taxpayers of more modest means may want to take full advantage of the annual gift-tax exclusion -- because once the year is over, your 2011 exclusion is gone forever.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance