I want to give my 2 children $45,000 each for Christmas presents. Will I have to pay tax on that?

Answer 1

Ignore the "business consultant," he doesn't know what he's talking about. The recipient never pays Gift Taxes. (And he has the numbers and procedures all wrong as well.)

You could, depending upon your lifetime gifting history have to pay some tax. You are allowed up to $12,000 per recipient per year without having to file a Gift Tax return. You may give to an unlimited number of recipients. If you are married, your spouse may do the same. If you each gave each child $12,000 just before the New Year and $12,000 just after the New Year, that would total $48,000 and no return would be needed at all. If you want to give them each $45,000 you'll either have to spread it over a few years or buck up and file the Gift Tax return.

If you give more than $12,000 to any one recipient per year you will have to file a Gift Tax return. The excess over $12,000 per recipient is then used against your lifetime $1,000,000 exclusion. So until you have given excess gifts that total more than $1,000,000 in your lifetime you will pay no tax. Do keep in mind that that exclusion will reduce your Estate Tax exclusion dollar for dollar so it could increase the tax on your estate when you pass if your estate is worth more than the Estate Tax exclusion, currently $2,000,000.

Answer 2

If you give more than $12,000 to any one person in a year, you are required to submit a gift tax return, but won't owe any money until the total of your taxable gifts exceeds $1,000,000.
You could give each $12,000 now and $12,000 on Jan 1, 2008. If you are married your spouse could do the same, for a total of up to $48,000 in the next couple of weeks.

Answer 3

The limit is $12,000 not $10,000. Why not give $12,000 for Christmas and $12,000 on January 1, 2008 to each of your children and avoid paying taxes unnecessarily.

Answer 4

You can give up to $12,000 per child each year w/o them paying a gift tax.

If you're serious, and are paying them by check (or bank transfer), then have them cash their checks (20k total) before the end of the year. Then at the first of 2008, you can do another round.

But that only gets you up to $24k per child w/o having to worry about gift taxes.

Your spouse could do the same...

Answer 5

First let me say, I'm not trying to be rude, but If you have that kind of money....first, don't you have some spiffy advisor to tell you, rather than ask on here? And let me ask YOU a question... with that kind of money to give as a "gift", WHY SHOULD IT MATTER....you should also donate to a local homeless shelter or Toys for Tots, or Share-A-Christmas or something...help someone who's in need. I'm sure if YOU have that kind of money, your children are doing okay in the financial department. Make a poor family's chrismas...it'll make you feel good!!

Answer 6

Why not look into a way of investing this amount of money for them. A financial advisor can help you figure out what to do, and it will be well worth it for a $90000 "gift".

Answer 7

What kind of job do you have that you can afford to give 90k away on Christmas? Only way ill ever have that kind of dough is to win the lotto... With that kind of money you should be able to afford a tax professional.

Answer 8

you or they will.
but, why not go to the bank with one and deposit the money with him/her on the account and able to write checks. they have the money and nobody pays. all you're doing is transfering your money to another bank. use different banks with each kid. merry christmas.

Answer 9

yes!! they will pay gift tax. You get one (tax free) gift in your lifetime so make it worth it. Gifts under 10k are not taxed. I would set up a trust fund and transfer the money this way which allows both parties to maintain control of the cash. This will mitigate gift tax.