would that relative ALSO have to pay taxes on that, so essentially the money is double-taxed?
i.e. if my mom (who doesn't live with me) won the lottery, and wanted to give me a million dollars, would I have to pay taxes on that million dollars even though she already payed taxes on the lump sum?
My mom didn't win the lottery. I'm just curious.
2007-03-08 04:51:08 · 3 answers · asked by BearBert 3 in Games & Recreation ➔ Gambling
Yes the double tax you mention would apply. In the case of parent-child there are some ways to pass on tax-free gifts but there are limits. The best way to "gift" money to a family member is to first form a limited family partnership or subchapter s corporation and have the money claimed in the name of the entity and then distributed directly to the family member.
2007-03-08 05:01:56 · answer #1 · answered by SA Writer 6 · 0⤊ 0⤋
your mom pays double tax....first the initial tax. when she dies the estate pays inheritance tax on $300,000 of the million she gave you. you don't pay taxes on a gift.
2007-03-09 02:06:16 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I think the largest gift she can give you is $10,000.00 a year.
2007-03-08 06:56:55 · answer #3 · answered by aimstir31 5 · 0⤊ 0⤋