Estate and gift tax in 2016

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CPAs and the BP community with input/knowledge/experience with large monetary gifts:

New Estate and Gift Tax for 2016

Sometime in 2016, my wife and I would like to give my parents a large sum of $40-60k as a gift. I understand that we can give a maximum of $28k to each donee for the annual exclusion amount. My wife and I file taxes as dual income, married for Virginia. Ditto for my parents. 

My lack of understanding involves the "applicable exclusion amount for gifts" from the above article, and maybe we're misunderstanding the annual gift exclusion as well. 

For the annual gift exclusion, it seems like we can give each of our parents $28k without any federal gift tax due on our part. Do they need to file the combined $56k as income?

For the applicable exclusion amount of $5,450,000 (2016), it seems like we can give them the entire $60k (or more) since, after subtracting the annual gift exclusion, it would be well under applicable exclusion amount of $5,450,000 (2016). There won't be any federal gift tax for the $60k gift. Is this a correct understanding? Likewise, do they need to file the $60k gift as income?

We do plan on consulting with a lawyer/CPA firm prior to pulling the trigger on this transaction. We are doing out initial research on understanding the process and greatly appreciate any input.

Thank you.

Account Closed the giftor (you) files the gift tax form. The receiver doesn't have to file anything.

You get an annual exclusion of $14k per person you gift to. If your spouse also gifts, you can gift any single person up to $28k annually without having to file any forms. If you are gifting to you mom and dad, you can gift each of them $28k for a total of $56k without filing any forms.

If you go over the $14k limit per person, you file a gift tax form. It's basically the way the IRS tracks how much of your lifetime exclusion you have left (currently $5.43MM). So if you gift any one person $20k, then you must reduce your lifetime exclusion by $6k. You don't pay gift tax until you use up your lifetime exclusion. BUT real estate investors need to be careful as if you use of your lifetime exclusion, it could be painful for your own heirs.

Another thing to consider - gift your parents by Dec. 31 and then gift them again Jan 1st. Then you get to exclude the gifts via the annual exclusion of they fall under the amount but are gifting twice the value.