Can I give them 15,000.00 year and pay their taxes ? Can I give them money to fix up their house if I have to move in their house for a while? I heard you could give so much money to family a year without counting it as spend down??? Thank you for answers kathy
Exclusions
•The annual exclusion for gifts is $11,000 (2004-2005), $12,000 (2006-2008), $13,000 (2009-2012) and $14,000 (2013-2017). In 2018, the annual exclusion is $15,000.
•The basic exclusion amount (or applicable exclusion amount in years prior to 2011) for gifts is $1,000,000 (2010), $5,000,000 (2011), $5,120,000 (2012), $5,250,000 (2013), $5,340,000 (2014), $5,430,000 (2015), $5,450,000 (2016), $5,490,000 (2017), and $11,180,000 (2018).
The new tax bill passed in mid-December 2017. Many searches may link to the old amounts before the increase. If your link or article is dated before December 2017, then it is probably no longer valid. The amounts shown above are per person, and could be doubled for a married couple.
However, if your question is regarding tax effects, then, yes, $15,000 is the 2018 IRS limit for excludable gifts (non-taxable) per recipient (e.g. child and spouse) per gifter (e.g. each parent). But you can actually gift much larger amounts without it being taxed as a gift by formally declaring on your tax return that such larger amount counts toward your $5.6 million lifetime estate exemption (double that for a married couple). Here's an IRS website that explains all this (the $14,000 listed as the annual excludable amount is for 2017): www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
Here's a news website that announces IRS updated limits for 2018: www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-11-2-million-per-couple/#143659ec4a4b
But don't ignore the sound advice of others regarding making sure that the care you may need in the future is not jeopardized by your current generosity; i.e. as freqflyer suggested, talk to an elder law attorney and/or certified financial adviser who is an expert in aging issues.
Personally, I wouldn't do the maximum amount, otherwise your family members may start to expect that money each year.
Now, if you have such money to give to give to your grown children, then you don't need to worry about "spending down" because you would be overqualified for Medicaid [which is different from Medicare]. Medicaid is used for people who are closer to living at poverty level, and cannot afford to pay for a nursing home. Or if they are a bit over the level, then they need to spend down, and the spend down is on themselves.
Be careful with the gifting. Assisted Living can cost around $7k per month [depending on location] or $84k a year. My Dad had caregivers, if he had them for a year it would have cost him $240k a year. Remember, you are only 65 years old, and I assume in good health.
Talk with an "Elder Law Attorney" to see if you would benefit from having a Revocable Trust.
Our "plan" is to live comfortably alone, then when one of us passes, the basement apartment will be used (if needed) as a caregiver's home. OR alternately, the remaining spouse will move to as nice an Assisted Living facility that we can afford.
My kids are ALL financially sound (better off that we are!!) and we have helped them all out over the years and in our dotage, we get to take care of us.
No keep what you have got in your own hot little hands for your own care.