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My mother in law wants to give us $28k from a home she sold. Will we have to pay taxes on it?

2007-07-04 05:26:03 · 3 answers · asked by Erin in California 1 in Business & Finance Taxes Other - Taxes

3 answers

Ignore the first response, she doesn't know what she's talking about.

Gift Taxes are paid by the donor, not the recipient. You will NOT pay any income tax on the gift, nor will YOU pay any Gift Tax.

The donor may have to pay a Gift Tax depending upon the amount and timing of the gift and their lifetime gifting history. When the gift comes from a foreign donor the rules get complex but that's the donor's problem, not yours.

Generally a foreign donor cannot be compelled to pay the US Gift Tax but there may be tax treaties that affect that. (There is one between the US and the UK that does address the issue though I don't know about any Swiss tax treaty that does.)

2007-07-04 06:06:34 · answer #1 · answered by Bostonian In MO 7 · 1 0

The recipient of a gift never has to pay a tax on the gift. The Swiss relative may or may not have to pay a gift tax...I have no idea what Swiss tax laws are. However, take the money and thank her and don't worry about paying tax...it ISN'T taxable to you.

2007-07-04 10:34:57 · answer #2 · answered by skipper 7 · 1 0

Yes, you will have to pay income tax. If she wants to give you 12,000 per year then no you would not be responsible for the tax. If she gives 12,000 this year to you, 12,000 in 2008 and the remaining 4000 in 2009 you can avoid income tax. It is called "gifting" Talk to your CPA for details. If she gives you all the money now you will be responsible for paying income tax on the remaining 16,000. 12,000 is the cap per year per person.

2007-07-04 05:34:05 · answer #3 · answered by Lily 7 · 0 4

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