@ajahearn - the lifetime exclusion:
the first $12.92 million of your estate is exempt from estate tax.
the first $17k you give any one person is tax free.
if you give someone more than $17k in a year, then in effect, the part that is over $17k 'eats into' the $12.92 million of the estate that is tax free from estate tax.
Let's say you give someone $100k in on year as a gift. You would have to report $83k on Form 709 indicating that you now only have $12,837,000 remaining to be except from estate tax. You are simply reporting that gift on form 709 but it doesn't create the need to make a tax payment.
make sense?
