If a parent gifts their child $200,000 in one year, is any tax owed by the child?
2007-01-29 10:23:58 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I SAW THIS ANSWER ELSEWHERE, SO WHICH IS CORRECT--THE FIRST TWO GIVEN HERE, OR THIS ONE:
GIfts ARE NOT taxable to the reciever. If you give any person more than $12,000.00 this year you will file an IRS form 709 (gift tax return. However,,,nothing will be owed until you use up the million dollar allowance we all get for lifetime gifts. Most of us will NEVER give away a million so it becomes a moot point. Just an IRS form to file.
Oh..and No you may not deduct the gift you gave on your own return. Many people want to do that but you may not. Think about all the gift giving there would be if the deduction existed.
2007-01-29 10:41:02 · update #1
Generally, NO. And the exclusion for 2006 is $12,000 - not $11,000, per person (i.e. husband and wife = $24,000). you pay on the amount over $24K.
See the IRS take (publication 950):
http://www.irs.gov/publications/p950/ar02.html#d0e123
2007-01-29 10:47:29 · answer #1 · answered by my opinion 2 · 0⤊ 0⤋
The first two answers are absolutely wrong. Your "additional information" is correct although I'm not sure about the limit being a million, might be more - it keeps changing every year. But if any tax were owed, it would be by the givers, not the recipient.
2007-01-29 12:05:52 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Absolutely. The child would owe income tax and the parents would owe gift tax on the amount over $11,000. The gift tax is about 50%.
2007-01-29 10:29:51 · answer #3 · answered by cinsingl83 3 · 0⤊ 1⤋
Oh, yea....gov't wants their cut! Quite a gift! ;-)
2007-01-29 10:32:18 · answer #4 · answered by Anonymous · 0⤊ 1⤋