If I receive a cash gift of $3500 from my grandfather, do I need to pay taxes to the IRS on this money?

Question

I'm very confused and cannot find how or where to report it, and I'm not sure if a gift tax or income tax applies. Please help!

Answer 1

You don't have to pay taxes on gifts. If your grandfather would have given you more than 12,500. he would have to report that gift and pay tax on that money, but he can give you up to 12,500 and neither of you need to pay tax. http://www.irs.gov/newsroom/article/0,,id=107815,00.html

Answer 2

You have no issue. A gift received is never taxable income in the U.S. You can receive any amount as a gift and owe no taxes. Gift tax applies to the donor not the recipient. In this case even your grandfather owes no tax. Each person can give up to $12K per year to as many people as he desires and the annual exclusion applies so there is no tax. If your grandfather gives you more than $12K in one year then he will need to file a Form 709 Gift Tax Return but still may not owe tax. Each person has a lifetime credit and until it is used you do not start paying tax on gifts made even though you must file the return. You're all set just be sure to say Thank You.

Answer 3

YOU never pay taxes on a gift to you. Your grandfather is not required to report the gift unless he gives at least $12,000 to one person in a single year. If he gives more in one year, HE has to file a gift tax return (different from income tax). That does not necessarily mean he owes gift taxes, just that a return is required.

Answer 4

No, there are no tax implications or reporting requirements on a gift that size for either the giver or the recipient. Neither gift nor income tax applies.

Say thanks, enjoy, and do something nice for your grandfather with a little bit of the money.

Answer 5

You wouldn't pay tax on a gift of cash no matter how large the amount. You grandfather can gift you up to $12,000. in one year without owing any tax on the gift himself.

Answer 6

Gifts such as this are not taxable to the recipient. The giver of the gift is required to file a gift tax return if he/she gives more than $12,000 per year to any one recipient. As long as this is all your grandfather gave to you, neither of you has any reporting responsibilities or tax liability. In any case, you wouldn't have a tax liability regardless of the size of the gift.

Answer 7

You don't need to claim the gift at all on your taxes. Someone can gift money to family up to I think $10,000 without anyone reporting it.

Answer 8

In 2006 you could get a cash gift of less than eleven thousand tax free. It is at least that in 2007; haven't checked to see if the ceiling has lifted past the 11k mark.

Answer 9

No, no tax is due on gifts you receive. Gift Tax is levied on the giver, not the recipient. If the gift is less than $12,000 in any tax year, no tax is due at all.

Answer 10

Any gift under $10000 is not taxed.