upper limit of $$ transferred within US?

Question

Hi, what is the upper limit of $$/yr allowed to transfer from one person to the other without having to pay tax?? thank you!

Answer 1

Depending on WHY the money is transferred, there is NO upper limit.

If they money is payment for work, there is not lower limit. If your TOTAL income from all sources is enough to require filing a tax return, EVERY penny must be reported even if the payer is not required to report to the IRS.

If the money is a gift, each individual can give any other individual up to $12,000 per year without having to report the gift. Above that amount, the GIVER must file a gift tax return. That does NOT mean taxes are due. There is a 'unified credit' that shields up to $1 million in reportable gifts from tax over your lifetime. Using the credit reduces the value of your estate that is exempt from estate tax.

If the money is for the sale of property, taxes are only due an the GAIN. If the seller originally paid $1 billion, they can sell for $1 billion without taxes due.