Q: I transferred a car to my son. I told him it would be part of my estate to him. Is this a legal inheritance?
I am still living.
A:
Transfers of property while a person is still living are generally considered gifts, and not technically "inheritance." Note, that inheritances and gifts are covered by the same tax exemption amount. So, any gift that you give in a year to a single person that exceeds $14,000 is subject to the gift tax. The giver is subject to the tax, not the recipient. Any gifts that you give while living that exceed that annual amount then get counted against the $5.45mil (as of 2016) exclusion of assets from the estate tax when you die. So, gifts while living DO impact the exposure of your estate to estate taxes when you die, but the exemption is pretty high at $5.45mil.
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