Section 1: 30–40%T2
Gifting Strategies and Education Planning
Exam Insight
Annual exclusion gifting and education funding are core TCP planning skills that move wealth out of an estate while controlling income tax. You must master the gift annual exclusion, gift-splitting, present-interest rules, 529 superfunding, education credits, and the kiddie tax.
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What AICPA Wants You to Know
- 1Apply the 2025 annual exclusion of 19,000 per donee and the gift-splitting election that doubles it to 38,000.
- 2Distinguish present interests (which qualify for the exclusion) from future interests and explain how Crummey powers create a present interest.
- 3Use the 529 plan five-year election (superfunding) and identify qualified distributions.
- 4Compare the American Opportunity Credit and the Lifetime Learning Credit and their phaseouts.
- 5Plan around the kiddie tax, taxing a child's net unearned income over 2,700 at the parent's marginal rate in 2025.
- 6Decide when to gift appreciated property versus cash, considering carryover basis and the future step-up.