I started receiving $2k a month from my parents as a gift starting this year. Do I need to claim this?

Question

I don't see why I would since they are gifting me money that has already been taxed.

Answer 1

For you (the receiver) there is no tax or filing. For 2007, your parents need not worry about filing as the gift amount will be less than $12,000. For 2008, you should get $1,000 per month from each of your parents, so that each one pays you $12,000 in a year and not $24,000 by one person.

1. A person can give any number of gifts of less than $12,000 to any number of persons. No tax is payable on these gifts. The person who receives a gift of any amount does not pay. If the gift is more than the annual exclusion limit of $12,000, the donor must file Gift tax return though he/she may not have gift tax liability. There is a life time exclusion limit of $ 1million.

2. All gifts of more than annual exclusion amount ($12000 for 2007) must be reported by the donor. There is a lifetime exclusion of $1 million. A person making a gift in excess of $12K must include the gift in the lifetime exclusion and file Form 706 to document the gift.

3. If you are married, both you and your spouse can separately give up to $12,000 to the same person in 2007 without making a taxable gift. (Thus your mother can gift you $12,000 and your father can gift your $12,000 in a year).

Publication 950-- Introduction to Estate and Gift Taxes.
www.irs.gov

Answer 2

Gifts are not income. There is no income tax on gifts.

However, there ais a gift tax. First, anyone can give anyone else $12000/ year. Mom gives you $12k and so does Dad. That $24k is equal to 12 x $2k/month. You are golden. BTW, if gift tax is due it is the giver's obligation, not the recipient's.

Somebody was paying attention when they planned this out.

Answer 3

You don't have to report it - a gift isn't taxable income to you.

If each of them gives you $1000 a month (write separate checks, even if it's from their joint account) then they don't have to file anything. If just one of them signs a $2000 check to you each month, they'd have to report it since it would exceed the $12K limit for one person to give to one other person in a year, but the gift tax return has a place to indicate gift splitting, and by splitting the gift evenly between them, there would be no gift tax implications.

Answer 4

You claim nothing... your parents, since they split the gift and gave you $1,000 each per month for the year, fall under (or at) the 12,000 annual exemption of the gift tax threshold.

Answer 5

You do not have to claim this. However, one parent can give $12,000 and the other parent can give $12,000. If the gift exceeds $24,000 then your parents have to complete a Gift Tax Form (#709).

Answer 6

Neither you nor your parents have to claim or report these monthly gifts of $2K. Enjoy.