If i transfer $30,000 to my sisters' account. Do i have to pay tax or not. Is therre something elses i need to do for the government?
2007-07-06 06:06:48 · 6 answers · asked by petersmith 2 in Business & Finance ➔ Taxes ➔ United States
Im unmarried, so does my sis
2007-07-07 13:34:45 · update #1
Yes. You have made a gift of $30,000 to your sister. Since the gift exceeds the annual $12,000 limit, you will need to file a gift tax return.
If your sister was married, you could transfer $24,000 ($12,000 to your sister and $12,000 to her husband) and then you would only file a gift tax return on $6,000.
You are allowed to give $12,000 any year to as many people as you wish. If you were married, you could give $12,000 to your sister and your husband could give $12,000 to your sister.
2007-07-06 06:59:13 · answer #1 · answered by skipper 7 · 1⤊ 0⤋
The rule is that any gift over $12,000 must be reported to the IRS by filing a gift tax return (Form 709), but you might be able to get around that. If you and your sister are both married, then you can give $12,000 to your sister and $12,000 to her husband, and your wife can give the remaining $6,000 to your sister. This effectively accomplishes the same thing (giving $30,000 to your sister) without triggering any reporting requirements.
But even if this is not an option, you probably won't owe any tax with the gift tax return due to the "unified credit." The current rules are that you can give up to $1,000,000 in gifts during your lifetime before you have to start paying gift taxes. IRS Pub 950 (linked below) explains this process. Good luck! :-)
2007-07-06 13:29:03 · answer #2 · answered by Anonymous · 1⤊ 0⤋
You MAY have to pay a Gift Tax. You will have to file a Gift Tax return. You get a $12,000 annual exemption, per recipient. After that any excess goes against your lifetime unified credit which is also tied to your Estate Tax after you pass. The lifetime credit is currently $1 million. If you haven't given that much in your lifetime yet, no Gift Tax will be due but your lifetime exclusion and Estate Tax exclusion will be reduced by the excess over $12,000.
2007-07-06 13:25:26 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Is your sister married with at least one child? Or not married and has at least two children? Then you could declare the gift to be for the benefit of at least three people, which would get the amount per person below the $12,000 per year per person level where gift tax applies.
2007-07-06 15:46:46 · answer #4 · answered by r2mm 4 · 1⤊ 0⤋
A few people already touched on if the recipient is married or not. Another thing that will factor into the equation is if *YOU* (the donor) are married, you may be able to elect a gift-splitting technique if your spouse gives consent.
2007-07-06 17:41:55 · answer #5 · answered by John B 2 · 0⤊ 0⤋
On an amount that large, you will have to pay gift tax on the amount by which it exceeds 12,000, which is the annual limit for tax exempt gifts.
2007-07-06 13:11:57 · answer #6 · answered by nightserf 5 · 0⤊ 3⤋