How much money can your parents gift to there children without paying taxes?

Answer 1

Q. How much of a gift can anyone give anyone else per year without triggering a 709 Gift Tax Return?

A. $12,000

Q. How much can two parents give a child each year without triggering the Form 709?

A. $24,000 ($12,000 x 2 parents). By they way, they can give this $24,000 to any number of people. If they wanted, they could give $24,000 to everyone in the world without triggering a Form 709. Relationship does not factor into how much can be given.

Q. How much can a parent give a child without triggering tax?

A. The recipient of gifts NEVER pays tax. The giver pays tax if the amount they report on all Form 709s they've ever filed total more than $1,000,000.

Q. What do you report on your 709s?

A. Any gift you make to any one person in any one calendar year that exceeds $12,000. The $12,000 changes from year to year. Last year (2005) it was $11,000. It hasn't been $10,000 for quite some time.

Example:

If you (let's assume no spouse) give your child $112,000 in a year, you will need to file a 709 and report $100,000 overage. You can do this for 10 years without triggering a tax. But, in the 11th year, the $100,000 you report on the 709 causes your total giving to exceed $1,000,000 and you will be taxed heavily on the overage. You can avoid the 709 and the tax alltogether by keeping the gifts under the threshold ... $12,000 for 2006.

Hope this helps :)

Answer 2

Tax Man is correct in his amounts, but a gift tax return may be required if the gift is less than $12,000, but is made in something other than cash - specifically, something whose value is subject to an appraisal.

Answer 3

$12,000 by each parent for a total of $24,000 per calendar year.

Answer 4

Up to $10,000 per child per year.

Answer 5

$10,000 per child per year.