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Probably not if you are talking about a 35,000 cash gift from some one that will not give away 5,000,000+ in his lifetime or have an estate when added to gifts does not exceed about 5 million.
As the receiver of $100,000 gift ( to pay off my pesky mortgage )...there are no taxes of any kind
to any one...she could have given me a million...same thing.
As the receiver of $100,000 gift ( to pay off my pesky mortgage )...there are no taxes of any kind
to any one...she could have given me a million...same thing.
Well that's incorrect, the person gifting you the money would owe taxes on the gift above the annual exclusion. The only way around it would be to apply that gift vs their lifetime exemption.
Well that's incorrect, the person gifting you the money would owe taxes on the gift above the annual exclusion. The only way around it would be to apply that gift vs their lifetime exemption.
Yes, that's important to know. Granted, gift amounts are virtually always applied against the lifetime exemption, which currently is $5.43 million per person. So as you can imagine, it is very rare that there are gift taxes on current gifts (at least at the level of people who post questions on internet boards rather than to their group of advisors)
Regarding gifts from both spouses, either they can each give from their annual exclusion, or they can elect to "split gifts", where Spouse A gives the entire amount from their assets but Spouse B consents to the use of their annual exclusion. There's some technical bits to that, but yes, Spouse B has to sign the form 709 to consent to gift splitting.
Yes, that's important to know. Granted, gift amounts are virtually always applied against the lifetime exemption, which currently is $5.43 million per person. So as you can imagine, it is very rare that there are gift taxes on current gifts (at least at the level of people who post questions on internet boards rather than to their group of advisors)
Regarding gifts from both spouses, either they can each give from their annual exclusion, or they can elect to "split gifts", where Spouse A gives the entire amount from their assets but Spouse B consents to the use of their annual exclusion. There's some technical bits to that, but yes, Spouse B has to sign the form 709 to consent to gift splitting.
If your gift is at or below the annual exclusion that isn't applied towards your lifetime exemption is it? I thought it was not as it's stated as an annual exclusion
If your gift is at or below the annual exclusion that isn't applied towards your lifetime exemption is it? I thought it was not as it's stated as an annual exclusion
Right, my response was unclear, my apologies. I meant gift amounts IN EXCESS OF the annual exclusion are virtually always applied against the lifetime exemption.
There's also the technical bit that a gift has to be a "present interest" gift (kinda like "here's a check for $14,000" or the like, rather than, say "here's an interest in a trust that you won't be able to get at for 10 years") to qualify for the annual exclusion. So a "future interest" valued at $10,000 would be applied against the lifetime exemption.
Obviously, all of these issues fall under the "such problems one should have" heading. And the usual disclaimer that I'm an idiot who doesn't know anything and people with these "problems" need to talk to real attorneys and all that.
Anything up to $14k from one individual to another is covered under the annual gift tax exclusion, and both isn't taxable and doesn't count toward the lifetime exclusion.
So if both the giver and the receiver are married, they can gift up to $56k per year, tax free. Persons A and B give to persons C and D as follows
A gives C $14k
A gives D $14k
B gives C $14k
B gives D $14k
Per the 709 instruction form, it only has be filed if one individual gives more than $14k in a year to another individual. So if your friend is just 1 person gifting another person, they'd have to do the form and pay taxes to gift $35k in a single year. But if there are 3 people in the mix total, no form is required and no taxes need to be paid.
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