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re: Kids Buying First Home
Posted on 10/5/23 at 8:33 am to MSTiger33
Posted on 10/5/23 at 8:33 am to MSTiger33
quote:
Gifts are not subject to income tax. The annual exclusion is $17k per person going up to $18k per person. Amount gifted over that in a year is a taxable gift that requires a gift tax return to be filed. Form 709. No gift tax will be due because you will use your lifetime exemption, currently $12.92M, this year to offset that tax. It’s more of an accounting.
Not that this pertains to me at all unfortunately, but can someone just give a straight answer?
Is it $17,000 or $12.9M?
Let’s say he wanted to give $50k? All good or no?
3
Posted on 10/5/23 at 8:44 am to PhiTiger1764
All good.
It's two different things. There is an annual exclusion and a lifetime exemption. If you are married then you are fine because you and your wife can each gift $17,000 to your daughter and $17,000 to your son in law and not go over your annual exclusion. If you go over your annual exclusion then you would need to report the overage of the gift on Form 709 and use part of your lifetime exemption.
In reality, there is a slim to zero chance you would get audited if you go over the annual exclusion amount and not file a 709. You would be ok filing a late 709 if it ever came to that.
It's two different things. There is an annual exclusion and a lifetime exemption. If you are married then you are fine because you and your wife can each gift $17,000 to your daughter and $17,000 to your son in law and not go over your annual exclusion. If you go over your annual exclusion then you would need to report the overage of the gift on Form 709 and use part of your lifetime exemption.
In reality, there is a slim to zero chance you would get audited if you go over the annual exclusion amount and not file a 709. You would be ok filing a late 709 if it ever came to that.
This post was edited on 10/5/23 at 8:45 am
Posted on 10/5/23 at 10:23 am to PhiTiger1764
quote:
Let’s say he wanted to give $50k? All good or no?
All good but the giftor would need to file Form 709 to report $33k to be applied to their lifetime gift exemption.
Posted on 10/10/23 at 5:54 am to PhiTiger1764
quote:
Not that this pertains to me at all unfortunately, but can someone just give a straight answer?
Is it $17,000 or $12.9M?
Let’s say he wanted to give $50k? All good or no?
The $17k is the threshold for reporting to the IRS so they can keep a running tally.
The $12.9 million is the threshold for when the donor has to start paying taxes.
Basically that keeps OT posters from dodging the estate tax by gifting everything to their kids.
This post was edited on 10/10/23 at 5:55 am
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