WHAT IS THE DIFFERENCE BETWEEN A GIFT OF A PRESENT INTEREST AND A GIFT OF A FUTURE INTEREST?
A. With a gift of a present interest the donor is allowed an annual exclusion of $10,000 per donee. A present interest gift is the unrestricted right to the immediate use, possession, or enjoyment of the property, or the income from the property. With the gift of a future interest, no annual exclusion is allowed. A future interest gift is a gift that will commence in use, possession, or enjoyment at some future date or time. WHAT ARE SOME EXAMPLES OF GIFTS OF REAL PROPERTY? A. Whenever you transfer title to real estate and you receive less than the fair market value of the property (in cash or other type of payment) and the transfer is not the result of a sale in the regular course of business, you may be making a taxable gift. EXAMPLE 1: John owns a vacant lot. He conveys title to the property to his son. John does not receive any money or other type of payment from his son. John has made a gift to his son equal to the fair market value of that lot. John is allowed to deduct an annual