Hello,

I am trying to get this general info regarding limits on gifting to charity vs family via 529 or similar plans. I am unable to find these answers explicitly and dont really want to make inferences. So any help that directly answers these will be great.

1) Is the annual limit ($14,000 for FY2015) per beneficiary netted with any other gifting to charity etc ?
2) Is there an overall limit to gifting i.e. for all beneficiaries, charity etc included ?

As an example, I have 2 kids and I also give $2000 to charity. Can I give $28,000 to the 529 plan and the $2000 to charities ?

Thanks

1) Is the annual limit ($14,000 for FY2015) per beneficiary netted with any other gifting to charity etc ?=====> Although qualified gifts to qualified charitable organizations are deductible for gift tax purposes, donors making certain types of gifts are required to file a federal gift tax return in order to claim the deduction; Certain transfers, a political party or non profit organization, are not considered gifts, and you will not have to file a Form 709;for example, as long as a return is not otherwise necessary to report non-charitable gifts, a donor is NOT required to file from 709 if the value of the contributed portion qualifies for the annual gift tax exclusion ; or the transfer qualifies for a gift tax charitable deduction, and the transfer consists of the donor's entire interest in the property, and no other interest in such property is or has been transferred (for less than adequate and full consideration in money or money's worth) from the donor to a person, or for a use. Gifts of a remainder interest, such as transfers to charitable remainder trusts do not qualify for the exclusion either.

2) Is there an overall limit to gifting i.e. for all beneficiaries, charity etc included ?=====>>Yes for gif tax purposes I mean ; general, the gift tax is tied to the estate tax. You can make the gifts during your lifetime; just you have to keep track of them as they count against the eventual estate tax exemption amount. You can leave to heirs without having to pay federal estate tax—will be $5.43 million in 2015; a husband and wife each get their own exemption. So a couple will be able to give away $10.86 million tax-free in 2015 as I assume that they haven’t made prior lifetime gifts.

As an example, I have 2 kids and I also give $2000 to charity. Can I give $28,000 to the 529 plan and the $2000 to charities ?======>>yes; then neither you nor yuour spouse needs to file form 709 The good news is that your contribution qualifies for the $14K annual gift tax exclusion($28K for gift splitting case) and so you can make fairly large contributions without incurring the gift tax . Because your contributions to a 529 plan are treated as completed gifts from you to the 529 account beneficiary, your $17,000 in contributions this year means you would normally have to report a $5,000 taxable gift. However, there is an exception available: You can elect to treat your gifts exceeding $28K( say if your gift amt is $40K;$20K from you, $20K from your spouse) in 529 plan contributions as if they were made ratably over 5 years instead of all in one year. The result of this election in your particular situation is an annual gift of only $8K ($40K divided by 5), which is obviously well below the $14K annual limit.

Thanks for the detailled reply.

1) Actuallt the question is if the charity gifts are added to gift to 529 i.e. If I dont want to pay gift tax, then should i contribute less to 529 so that the total (529 gift + charity gift) is less than the 14K limit ? I understand that donating some may ned to file form 709.

2) So for a married with 2 kids - I can give $56K between two kids and me and my spouse + $2000 for charities for a total of $58,000 for FY 2015 ?

Thanks

1) Actuallt the question is if the charity gifts are added to gift to 529 i.e. If I dont want to pay gift tax, then should i contribute less to 529 so that the total (529 gift + charity gift) is less than the 14K limit ?===>>Correct ; please read below.
I understand that donating some may ned to file form 709.======>>Correct;

So for a married with 2 kids - I can give $56K between two kids and me and my spouse + $2000 for charities for a total of $58,000 for FY 2015=====>>Correct;
As an example, I have 2 kids and I also give $2000 to charity. Can I give $28,000 to the 529 plan and the $2000 to charities ?======>>yes; the annual gift-tax exemption allows you to contribute a specified amount to each person you give to without triggering gift taxes. So, contributions to 529 plans count against this annual limit; I mean say, your annual gift-tax exemption for 2015 is $14K and you contribute $16K to a 529 plan for your son, $2K($16K-$14K) would be subject to gift taxes. However, if you contributed $9K to your son's 529 plan and $9K to your daughter's plan, you wouldn't have any gift-tax implications. However, as said previously, when you contribute more than the annual limit to a 529 plan, you can elect to treat your gifts exceeding $28K( say, if your gift amt for the 2 kids is $56K;$28K from you, $28K from your spouse) in 529 plan contributions as if they were made ratably over 5 years instead of all in one year. The result of this election in your particular situation is an annual gift of only $11.2K ($56K divided by 5), which is obviously well below the $14K annual limit.So, you you are treated as having made a $11.2k-per-year contribution over each of the next five years, putting you $$2.8k under your annual limit. See what I mean??????

Great. Thanks