Gift tax problme in California.?

Question

My father is giving me 10000$ cash as gift per year since last 5 years. If I deposit this money in the bank now will I run in to a problem? How much tax is gonna be involve in it?

Another question, If he wants to give me ONE MILLION $ how much gift tax is gonna be there and what documentation will be required?

Answer 1

You do not ever pay tax on a gift that you receive. The gift tax is the givers obligation. You father can give you up to $12,000 a year without any need to report the gift or ever pay any gift tax. The gift is below the yearly limit so it does not apply to the lifetime gift exclusion limit.

If he wants to give more than the annual limit he will need to file a gift tax return. The amount will apply to his lifetime exclusion. After his death, his estate mayl need to pay estate tax becuase he has used some or all of the lifetime exclusion.

Answer 2

Geez, where have you been keeping it? In your refrigerator? If you deposit $50K it will be reported to the IRS, and you could run into problems trying to prove that it was given over 5 years if it was really all in cash. It will look very suspicious.

A gift isn't taxable to the recipient, and a gift under $12K per year doesn't have to be reported by the giver.

If your dad gives you a million dollars he'll have to file a gift tax return, but if he uses his lifetime exemption he might not have to pay any gift tax. But this would affect how much of his estate is ultimately taxable.