How do you gift money to other people without having the money be taxed twice?

Question

Say I were to make 100k through my business, pay all the appropriate taxes on it, and then I want to give 50k to a friend.

How would I give that 50k to my friend so that my friend would not also have to pay taxes on the 50k?

Answer 1

Gifts are taxed to the giver, never to the recipient.

You have a $12K limit from you to any one person per year. If you give to a married person, you can gift $12K to each spouse.

If you go over this amount, you have 2 choices. One, you can pay the gift tax, or

two, you can start to use your lifetime exemption credit. Currently, gift and estates are exempt on the first 1.5 Million per person once in your lifetime. Gifts given during your lifetime are added so that if you give more than this during your life, you will owe tax (or your estate will). This exemption amount increases every year until 2009, when it rolls back to $1MM if Congress doesn't change the law.

The WealthBuilder

Answer 2

Pay your friend straight out of your business (business check) and list it as an expense. This way you don't pay/pay little taxes on it since it's a business expense, and he/she can deposit it directly into a personal account not having to declare it (unless you or him/her gets audited).

Answer 3

you can give them $12 k annually or if they are married $24 k...that's the legal way to gift the money according to the IRS

Answer 4

divide it up over 5 years
I believe the limit is $10,000 per year to avoid taxes

Answer 5

Slip under the table is about all you can do, Uncle Sam wants his share no matter what.

Answer 6

There is an annual limit to gifts, which is (I think) $20k per person.

Answer 7

i would slip it to him gradually. i believe that any withdrawls from your bank of $10,000 or more will be reported to the feds.