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How to Model Annual Gifting in eMoney

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During the holiday season, giving gifts to loved ones is always top of mind. In eMoney, gifting is often used in estate planning for high net worth individuals looking to pass along their wealth to the next generation or their favorite charities.

Today, we’ll look at how to model past taxable gifts, planned gifts, and charitable gifts in eMoney and the best reports to check your work and present it to clients.

Past and Planned Gifts

Before adding gifts, it’s important to note that the IRS limits the amount you can gift tax-free. In 2019, the annual exclusion is $15,000 per recipient per year. Any gifts exceeding the annual exclusion amount will be added back into a client’s estate for estate tax purposes.

First, let’s review how to add taxable gifts the client has made in the past. This step is important for calculating estate taxes.​

To model a past taxable gift: 

  • Go to Advanced Facts.
  • Click Miscellaneous Assumptions > select Gifting tab. ​
  • Enter the total value of all past taxable gifts.

You’ll also notice the option to split gifts in this section. The system defaults to Yes, gifts will be split for tax purposes to allow for easy use of both spouse’s annual gift exclusion.

Next, you can enter gifts made in the current year and any gifts planned for future years as Planned Gifts.

To model a planned gift:

  • Go to Advanced Facts.
  • Click Wills & Gifting > Planned Gifts > Add Planned Gift.
  • Enter a dollar amount, a percentage of the asset, or select Use Maximum Annual Gift Tax Exclusion. The annual exclusion option will cap the gift at the available amount each year.
  • Select the grantor, recipient, and the start and end dates.
  • Click Save.

Charitable Gifts

Your client may also want to gift to charity. There are no limits or gift tax consequences for charitable gifts. Clients will also receive an income tax deduction. Adding a charitable gift in eMoney is similar to a planned gift, but with one additional step. First, you’ll need to enter the charity.

To model a charitable gift:

  • Go to Advanced Facts.
  • Click Entities > Charities > Add Charity.
  • Select the appropriate option for the AGI Contribution Limits and Treat Gift As fields and click Save.
  • Follow the steps for entering a planned gift and be sure to select the charity as the recipient.

Gift Reports

Finally, we’ll look at a few of the best reports for showing your clients’ annual and lifetime gifts.

  • Detailed Estate Calculations – In this report, you can see that the total value of past taxable gifts gets added back into the estate for estate tax calculation. It shows as the line item Adjusted Taxable Gifts During Lifetime. You can also look at future years to see that this value will increase if a client continues to make taxable gifts each year.
  • Gift Tax – This report shows a high-level view of all gifts entered into a client’s Facts. For each year, you can view the total gifts given, taxable gifts given, gift tax, and more.
  • Gift Tax Events Ledger – This report shows a more detailed look at all gifts. It will show each gift made for every year, their value for gift tax purposes, and the annual exclusions.
  • Income Tax – To view the charitable gift deduction, you can click the Regular Federal Income Tax column and then click Below Line Deductions column.

For more information on how to model gifts in eMoney, check out our Planned Gift User Guide.

Questions? Give us a call at 888-362-8482 or send us an email.

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