In California, my father wants to give me 100000 $ as gift. How much is the tax he has to pay? What are the other terms and conditions apply on this scenario? I am 25 and married.
2007-07-17 08:53:35 · 15 answers · asked by SheLady 2 in Business & Finance ➔ Taxes ➔ Other - Taxes
Wow! I've seen some buckets full of wrong answers here but this is pretty surprising: 14 totally or nearly totally wrong answers in a row. This may be a record! Anyhow, Judy's answer wasn't here when I started typing. I would not have posted anything if I'd seen hers since hers is the first correct answer of the lot -- as we have come to expect from Judy.
Any tax will depend upon his lifetime Gift Tax history. If he's never given a gift or gifts that triggered the need for a Gift Tax return, no tax will be due from a single $100,000 gift.
He could dodge the bullet on a significant portion of the lifteime exclusion ($1,000,000 currently) if he and his wife each gave $12,000 to you and your husband. That would cover $48,000 right there and no Gift Tax return would be due. If they duplicate that after the first of the year, $96,000 is now covered.
As far as the gift to you is concerned, there can be NO "terms and conditions" involved. If there are, it's NOT a gift and YOU will have to pay tax on the amount as ordinary income.
2007-07-17 11:11:52 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
He'd have to file a gift tax return. He wouldn't necessarily have to pay any tax as long as he hasn't already used up his lifetime exemption, but if he doesn't, it could affect the tax on his estate when he dies if he has more assets than whatever the limit is then.
This is for federal - I don't know if there would be any state tax implications in CA.
Most of the answers above are partially or completely wrong, by the way - even some with some "thumbs ups" are wrong. If any tax is owed, your dad will owe it, not you. He can give you, or as many people as he wants to, up to $12K a year without having to report it. And last I looked, CA definitely had an income tax, although it would very likely not apply to this gift from your dad.
2007-07-17 09:13:08 · answer #2 · answered by Judy 7 · 2⤊ 0⤋
There are gift taxes but he may be able to circumvent around that by giving you a gift, but realize there is a limit of $12,000 a year that can be given while avoiding the tax.
Tax law says you can give away only $12,000 to any one person in any one year; gifts above this amount are subject to the gift tax. Since Edna gave her niece $15,000, Edna could be required to pay gift taxes on $3,000. How much is the gift tax? The same as the estate tax: It starts at 18% and climbs to 45%.
2007-07-17 08:57:03 · answer #3 · answered by jay k 6 · 1⤊ 1⤋
Suppose your father placed that money into a joint checking account with you and your father. Now he can put that money in and you can write all the checks you want up to 100,000 and no one has to pay the fed anything. It all depends on what you want to do and how much you enjoy paying the government to give away your money. Quite frankly, the notion that the government gets to tax money you give to someone is assinine.
2007-07-17 08:58:47 · answer #4 · answered by IG64 5 · 1⤊ 2⤋
He probably DOESN'T have to pay taxes. He can write it off as a gift. YOU, on the other hand, will be obligated to pay on it as income. I'd put a third of it aside in savings or something to be safe and then you don't have to worry about it until you do your taxes.
In any case, DO report it on your taxes, unlike what a couple of people suggested. The IRS can easily access your bank records and see that you received a large amount of cash, especially if your father deducts it from his taxes. Not reporting it could land you a large fine, or worse.
2007-07-17 08:57:06 · answer #5 · answered by Mr. Taco 7 · 1⤊ 4⤋
I want you to know a gift is TAX FREE. I called the IRS and spoke with a rep. My case is I knew a woman that LOANED money to a religious professional. There was no contract. The 'religious' professional claimed about the same amount you are asking about was a gift.
The IRS said there was NO TAX at the federal level.
2007-07-17 09:04:05 · answer #6 · answered by Anonymous · 0⤊ 3⤋
california doesn't have an income tax, so you don't have to worry about that, but you will have to pay federal income tax on the money (note, you pay the tax, he doesn't).
I'd highly recommend consulting a lawyer and setting up a trust fund, it will save you tens of thousands of dollars because you can transfer money basically tax-free.
another option you can try is opening a joint savings account. he can make a deposit and you can make a withdraw so he doesn't give the money directly to you, once its in the account it is shared money.
2007-07-17 08:58:22 · answer #7 · answered by Anonymous · 1⤊ 3⤋
I think you would be responsible for those taxes. Either way ask your accountant/ tax person they are the only ones who can tell you because they know all your business like what you make etc... Oh and is you dad married? If not tell him I said HI!!!! LOL
2007-07-17 08:57:03 · answer #8 · answered by Amber 3 · 1⤊ 3⤋
i don't think he'll have to pay any. call 208-578-7931, that is my financial planner and he will definitely know the answer. he helps people on small advice for free all the time, he's a great guy!
2007-07-17 08:56:45 · answer #9 · answered by Anonymous · 0⤊ 1⤋
I Don;t know but use the money wisely and invest some of it in a cd for your kids or your retirement.
2007-07-17 08:56:38 · answer #10 · answered by Dew 7 · 0⤊ 2⤋