Gift Tax and High-Yield Checking Account

Dear Mr. Berko: Our accountant told my wife and me that we can’t gift more than $15,000 at a time without incurring a tax. I know there are more ways to skin a cat and hope that you have some thoughts on this.

Also, I recall reading somewhere in the past few days of a bank that pays over 4 percent on checking account balances. Could you please tell me the name of that bank, because we have a large amount of cash to deposit that’s getting only 0.02 percent? — RIP, Akron, Ohio

My Dear RIP: If that’s what he said, then your accountant is dumber than a bowl of mice.

One of the best reasons to establish an estate plan is to be certain that people who are most important to you receive the assets you wish them to have when you pass away. However, you can gift a large portion of your wealth before you pass on — and avoid paying taxes on your gift.

For some reason, most folks think that the maximum amount a single person can gift without paying a federal tax is $15,000 a year. And for some reason, most people believe that the maximum amount a married couple can gift is $30,000 without paying federal taxes. But those perceptions are as wrong as cotton candy trees growing in Central Park. In fact, you can gift $75,000 or $250,000 or $2.5 million to your daughter, a fifth cousin, a distant friend, Karl Marx IX or me without paying a nickel in federal taxes. Not even the recipient will have a tax responsibility upon getting your generous gift. And you must know that the gentle, friendly and loving IRS will allow you, as an individual, to gift up to $11.2 million in cash, securities, artworks, coin collections, real estate or precious metals to anybody without a tax liability to the giver or givee. And if your wife is feeling generous, then together you can gift $22.4 million without having a tax liability. Now, any amount over $11.2 million for a single individual or any amount over $22.4 million for a married couple will be taxed at 18 to 40 percent.

It seems that most folks don’t understand that the $15,000 limit per year (it will probably be raised in 2019) applies only to filing a gift tax return and has nothing to do with the total amount you or you and your spouse are allowed to gift each year. Consider it this way. The main purpose of filing that three-page Form 709 is so the IRS can keep track of the amount of lifetime exemption you have used. If you gift your fifth cousin $300,000 to purchase a used Lamborghini with 57,000 miles on the odometer, you will file a gift tax return showing that amount. Though the taxable amount of that gift is $285,000, you won’t pay federal taxes on that amount because you haven’t used up your $11.2 million lifetime exclusion. By the way, my tax consultant, Dan de’Lion, who is a tax genius, agrees with you. He tells me that there are many ways to skin a cat but not one of them is pleasant!

Consumers Credit Union, located in Gurnee, Illinois, has nine branches and has been serving Illinoisans in bucolic small towns such as Round Lake Beach, Mundelein and Volo since the 1930s. If you meet the minimum requirements and charge at least $1,000 a month on its Visa card, CCU’s checking account will give you an annual percentage yield of 4.59 percent on balances up to $20,000. On balances above $20,000, it’ll pay spit.

Another bank with potential for high yields is First Advantage Bank (FABK-$25.50), which is nestled in Clarksville, Tennessee. If you meet its minimum requirements, FABK will pay a 4.5 percent APY on checking account balances up to $10,000 and 2.01 percent on balances from $10,001 to $50,000 and 0.51 percent on balances over $50,000. FABK has five bricks-and-mortar offices in Clarksville, two in Franklin and one in Nashville.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at





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