Specifically can I receive 2 gifts (from each parent) of $12k making a total of $24k without having to pay taxes? Or is it just the first $12k that is tax free?
2006-08-05 12:38:46 · 3 answers · asked by Paul T 1 in Business & Finance ➔ Taxes ➔ United States
its 11k from each parent before taxes kick in
2006-08-05 12:46:35 · answer #1 · answered by george 2 6 · 0⤊ 0⤋
First of all, you will never pay taxes on gifts that you receive. Gift taxes are payable by the donor, in this case your parents. I believe the annual exclusion for gifts is $11,000 per donee, unless it has been indexed again for inflation in 2006, which I don't believe i has. You parent's must elect to "split gifts", meaning that they can each give you $11,000 and not have to file a gift tax return. Also, to qualify for the annual exclusion the gift must be one of a "present interest", meaning that you immediate use of the property. This usually comes into play when a gift is made that that will not benefit the donee until the future, often times a trust.
2006-08-05 13:08:46 · answer #2 · answered by Tax Man 2 · 0⤊ 0⤋
The gift tax exclusion for 2006 is $12,000 per individual. You can receive $12,000 from each parent and they will not have a file a gift tax return.
If you receive more than $12,000 from one parent, a gift tax return must be filed, but they can elect to split their gifts so up to $24,000 can be given in total without any tax consequence at the federal level.
If they give more than that, the gift may not be taxable but will eat into their lifetime exemption of $1,000,000. Once they give more than $1,000,000 (for each) they start paying tax. Also, the excess gift will be added to their estate in computing their estate tax.
2006-08-05 16:35:42 · answer #3 · answered by NotEasilyFooled 5 · 0⤊ 0⤋