Gift Tax

[seldomseen]

Maybe someone who works in accounting can offer some guidance. At what dollar amount must you claim the gift? Besides having a trust is there anyway to lower the tax burden?

 

[TomGshotput]

If there is a chance you'll ever have to pay this tax you're extremely wealthy. Anything over $14,000 per person per year needs to be reported. You don't pay anything until lifetime gifts have reached the millions. If it's for medical care or education it can be more.

 

[seldomseen]

Well i'm not extremely wealthy and the gift will not be over $1m. So you report it but don't actually pay the taxes on it?

 

[mountain]

Well i'm not extremely wealthy and the gift will not be over $1m. So you report it but don't actually pay the taxes on it?

It's a tax free event, you don't have to report it as long as it is a true gift.

 

[Willie99]

Well i'm not extremely wealthy and the gift will not be over $1m. So you report it but don't actually pay the taxes on it?

14k or less is not reportable

anything over 14k is required to be reported (I'll call that excess gifts) , but not taxable in the overwhelming majority of cases (almost never taxable)

although excess gifts are reportable, they're not taxable until cumulative lifetime excess gifts exceed the estate tax exemption, currently 5.43 million dollars

and should cumulative lifetime excess gifts exceed 5.43 million dollars, the person making the gift is first responsible for the tax, not the person receiving the gift


to conclude;
1) the person making the gift may have to file a return
2) if cumulative lifetime excess gifts exceed 5.43 million dollars, the person making the gift will be subjected to gift tax
3) the person receiving the gift does nothing but deposit the check

PS: federal law, states can and do vary

 

[seldomseen]

Good info. Thank you.