Is it possible for a professional in the U. S. to recive money as a gift from family members without attracting taxes? Is there a non-taxable limit? If so, what is that amount? What is the tax rate on exceeding that limit?
I would appreciate genuine, simple answers from people who know, not just links, though I'm willing to read the sites as well..
2007-07-23 05:29:49 · 6 answers · asked by gita n 2 in Business & Finance ➔ Taxes ➔ United States
A gift is never taxable to the receiver. If someone gives over $12,000 in a calender year to any one person, the giver has to file a gift tax return and possibly pay taxes on it. The giver has a $1,000,000 lifetime exclusion before they have to pay tax, but if they use up some of that exclusion, it will affect the amount of estate they can leave tax-free when they die.
2007-07-23 05:40:19 · answer #1 · answered by Judy 7 · 4⤊ 1⤋
You can receive any amount of money tax free from anyone. But the giver can only give up to $12,000 per year tax free, after that they need to file a gift tax return, but have a $1,000,000 lifetime exclusion to use up.
2007-07-23 06:08:31 · answer #2 · answered by Anonymous · 1⤊ 0⤋
As for federal income tax on gifts from on individual to another there are none. Some states treat gifts differently so it would depend on the state in which the recipient lives.
2007-07-23 05:35:36 · answer #3 · answered by ? 6 · 0⤊ 1⤋
The other answers are correct, gifts are not taxed to you.
From the wording of your question, I assume the gift you will receive is from a non US citizen. The IRS requires that you report such a gifts if in any one year they exceed $100,000. This report is for information purposes only, so that the IRS can determine that the transfer is in fact a gift and not taxable to you.
The form to report receipt of foreign gifts is here:
http://www.irs.gov/pub/irs-pdf/f3520.pdf
2007-07-23 06:10:11 · answer #4 · answered by ninasgramma 7 · 0⤊ 2⤋
WELL I could answer the question but I think it has been answered from all angles and they are correct.
Okay, maybe one more angle...if your Mom gives you $12,000 your Dad can also give you $12,000 and it is still not a taxable or reportable event.
2007-07-23 06:30:19 · answer #5 · answered by Russ B 6 · 0⤊ 1⤋
The limit is $10,000.00 per year per person. This is the "short" answer you wanted.
See this link for gift tax rates: http://www.savewealth.com/planning/estate/taxes/
For a short tutorial on gift taxes see: http://law.enotes.com/everyday-law-encyclopedia/estate-and-gift-tax
2007-07-23 05:39:16 · answer #6 · answered by utarch 5 · 0⤊ 6⤋