My wife's grandparents want to give us $37,000 as a gift. What kind of taxes am I looking at?

Question

I've never received this kind of money before at one time. Are there any tax exemptions up to a certain dollar amount that you can receive before you have to claim it?

Answer 1

Actually, a better way to do it might be to have them gift $9999 per year until that dollar amount is reached. The limit is $10,000 per year as a gift (tax free). Otherwise I imagine it would be roughly 1/3 of the $37,000 for taxes. Nice grandparents by the way!

Answer 2

To be honest, if they are writing you a check, I would not report it, but just to be safe, you could go here:

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html#gift

I have no tax experience so I cannot really explain this to you. From what I can make out, the person giving the gift has to pay the tax, but I skimmed through the site. The IRS never makes anything simple to read these days. If in doubt, ask someone that has tax experience.

Answer 3

The excemption amount should be $12300/year 06 and you dont have to pay any tax in any cases because it is the payor's responsibility to pay it but you have to report it on your tax return.

Besides, there is a thing call unified credit which is around 1.5 million which means you can give a gift of 1.5 mil to someone without paying any tax.

you should ask your tax advisor about the gift estate tax or you can try to search it on the internet. I am not practicing in this area so i can only tell you briefly about the rules.

Answer 4

Gifts are not taxable to the recipient. Your wife's grandparents will have to file a gift tax return, however, because any gifts given above $10,000 (or $12,000...I think it increased) per giver per year affects the estate taxes when one of them passes away. This does not affect YOU, though. If they have $37,000 to just give away, I'm sure that they can afford their own tax counsel.

Answer 5

Actually, you would have no gift taxes. The gift taxes are the responsibility of the grantor (grandparents) not the grantee (you and your wife). They would have to file a gift tax return because it is over the $12,000/year exclusion, however they would not have to pay the taxes as long as they don't give over $2.5 million (pretty sure that's the limit) in their lifetime.

Answer 6

Nick C's got it right. Make sure grandma and grandpa write separate checks to each of you (4 checks in total). If they do, they'll be under the $12k/yr exclusion and are not even required to report it on a gift tax return.

Answer 7

The gift exemption in 2006 is $12,000 for each grandchild. I suggest that if you are getting $37K each, have them give some of that gift to you next year so as to reduce the tax bill.

Answer 8

You don't pay the tax...the giver does, but you don't have an issue here...if the grand father gives each of you 11 K, and the gmother does the same, that's 44K without a problem...unless the law has changed.