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The Foresight 
March 2016
Dear <<First Name>>,
After experiencing some warm days over the past few weeks and setting our clock forward this past weekend, we know that spring is on the way. One thing that comes along with blooming flowers and green grass is the annual tax day in April. This year tax day is April 18th so don't forget.  I share an excellent article on gift tax basics because it is never too late or early to begin using these techniques.

Each month I share thoughts on various topics in the world of personal finance, investing, economics, and business through my writings. May you find my musings informative, thought provoking, and enjoyable.

Thank you for continuing to read and I look forward to your comments.

Walid L. Petiri AAMS, RFC
Financial Management Strategies, LLC 

Gift Tax Basics


The federal government imposes a substantial tax on gifts of money or property above certain levels. Without such a tax, someone with a sizable estate could give away a large portion of their property before death and escape estate taxes altogether. For this reason, the gift tax acts more or less as a backstop to the estate tax. Yet few people actually pay a gift tax during their lifetime. A gift program can substantially reduce overall transfer taxes; however, it requires good planning and a commitment to proceed with the gifts.

Advantages of Gift Giving
You may have many reasons for making gifts - some people have personal motives, others are motivated by tax considerations. Many want their gift-giving program to meet both personal and tax-planning objectives. Reasons for considering a gift-giving plan include:

  • Assisting someone in immediate financial need
  • Providing financial security for the recipient
  • Giving the recipient experience in handling money
  • Seeing the recipient enjoy the gift
  • Taking advantage of the annual exclusion
  • Paying a gift tax now to reduce overall taxes
  • Giving tax-advantaged gifts to minors

Gift Tax Annual Exclusion
Perhaps the easiest way to reduce the size of your taxable estate is to make regular use of the gift tax annual exclusion. You may give up to $12,000 each year to as many persons as you want without incurring any gift tax. (Congress has now indexed this gift level to inflation; however, the figure will rise only in increments of $1,000.) If your spouse joins in making the gift (by consenting on a gift tax return), you may (as a couple) give $24,000 to each person annually without any gift tax liability.

Unlimited Gift Tax Exclusion
In addition to the $12,000 exclusion, there is an unlimited gift tax exclusion available to pay someone's medical or educational expenses. The beneficiary does not have to be your dependent or even related to you, although payment of a grandchild's expenses is a common use of the exclusion. You must make the payment directly to the institution providing the service -- the beneficiary himself or herself must not receive the payment.

Gift Programs and Your Estate
Use of the gift tax exclusion in a single year may not affect your estate tax situation significantly, but you can reduce your taxable estate substantially through a planned annual program of $12,000 gifts ($24,000 if you are married). All gifts within the exclusion limits are protected from federal estate taxes.

In addition to reducing the size of your estate, another major tax advantage of making a gift is the removal of future appreciation in the property's value from your estate. Suppose that you give stocks worth $50,000 to your children now. If you die in 10 years and the stock is worth $130,000, your estate will escape tax on the $80,000 appreciation even though you pay a gift tax on your next tax return.

To learn more about gifting strategies and how they can play a role in your tax and estate planning, contact us to schedule a consultation. We'll be happy to help.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Past performance is no guarantee of future results. Diversification does not ensure against loss.

Source: Financial Visions, Inc.


Mr. Petiri is the owner of Financial Management Strategies, LLC (FMS) a Registered Investment Advisor established in the year 2000. He has over two decades of financial experience that covers virtually all areas of finance from tax, insurance, stockbroker, personal financial planning and personal banking to corporate credit, business planning and consumer lending. Additionally in 2011 he co-founded CASI Institutional Consulting, Inc. (CIC) an institutional investment advisor that provides Investment policy statement (IPS) preparation, investment manager search and selection, and state of the art asset allocation designs including the creation and implementation of emerging and diversely owned investment manager initiatives.  Combined he advises on over $3. 3 billion of assets invested by clients who are public pensions, state funds, private endowment and foundations, as well as select individuals.

He is a graduate of New Jersey's Montclair State University with a degree in both business management and finance. Mr. Petiri is a recipient of the Accredited Asset Management Specialist designation from the College of Financial Planning in Denver, Colorado. He is also a Registered Financial Consultant and select member of the International Association of Registered Financial Consultants, an organization of professional financial advisors who are required to maintain a high standard of education, experience and integrity.  

Mr. Petiri has frequently been heard on WEAA (88.9 FM) as a financial commentator, appeared on WMAR-TV 2 regarding the 2008 & 2009 economic downturn, and MTA Commuter Connections regarding residential land development. He has been interviewed and quoted by the Investment News magazine, written for the Journal of Personal Finance, is a frequent contributor to the IARFC publication, The Register, Popular Finance (of China), Minority Enterprise Advocate magazine, and publishes a monthly financial advice column called the Foresight. Mr. Petiri was also quoted in and currently writes for the Baltimore Examiner. Most recently, Walid’s articles can also be found on Aging News Alert,,,, Wall Street CheatSheet, Examiner, and   

In June 2012, Walid was featured in SmartCEO Magazine - Baltimore for the 2012 Top Money Managers Wealth Management. Walid serves on the Finance Committee of Associated Black Charities and is member of Bethel African Methodist Episcopal Church. He also serves on the Finance Committee of Associated Black Charities and serves on the Board of Directors for the Reginald F. Lewis Museum. He is a devoted parent to his son and daughter.


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Walid L. Petiri AAMS, RFC
Chief Strategist

Financial Management Strategies, LLC
1330 Smith Avenue
Suite 7
Baltimore, MD 21209

(p) 410-779-1276
(f) 410-779-1302

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