Fiction: Giving away things such as jewelry, art, and valuable collectibles is a smart way to avoid the gift tax, because these items are not considered as part of the $12,000* per year/per person gifting limits.

Fact: Giving these types of items may absolutely make sense for you, but these gifts do count toward the annual gifting limits. There may be different estate planning and transfer options that shelter these assets from the gift tax, however. These options should be discussed with a qualified professional.

*Gifting limit for 2008.


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