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A tax-free 'gift' can only be 10k or less. More than 10k is not tax-free [per gift].
Now if you had handed that cash in smaller increments, broken into individual gifts of less then $10k each, then they would each be tax-free. there is no limit to how many gifts you give in a year, nor in a single day.
the limit of 10k or 20k if married applies toany single person per year. you cant give 1 person more then that no matter how you break it down in payments. the truth is ,its the honor system.
I can check with my Dw [the accountant], however the last time that we were involved with 'gift's there was no limit to how many nor how often they could be given.
A tax-free 'gift' can only be 10k or less. More than 10k is not tax-free [per gift].
Now if you had handed that cash in smaller increments, broken into individual gifts of less then $10k each, then they would each be tax-free. there is no limit to how many gifts you give in a year, nor in a single day.
Wow, not a single line of your post is true. I know you're trying to be helpful, but please check authoritative sources before posting.
The annual gift exclusion is currently $13,000 per person. The amount is more or less indexed to inflation. $13,000 is the yearly limit, hence the categorization of it as "annual." The $13,000 can be a single gift or broken into smaller gifts over the course of the year. If a single individual gave 10 separate $10,000 gifts in 2010, they will have $87,000 apply against their lifetime unified credit (see Publication 950 (12/2009), Introduction to Estate and Gift Taxes for an explanation of this).
kweatherford, if your tax preparer is insisting you owe federal taxes for a $13,000 gift, I would find a different tax preparer. However, if it is California taxes, I don't know California tax law at all, and would suggest you ask your preparer about the CA publication/form/tax code section to which he/she is referring. California may well have a lower gift tax exclusion than Uncle Sam.
I took $13,000.00 and gave it to my daughter in 2010. Now my tay preparer says I must pay taxes on the amount I withdrew. Is that correct and what would my taxes (California) be for the $13,000.00
When you say "the amount I withdrew." If you are talking about withdrawing from an IRA or other tax deffered account than yes, you owe money on the withdrawl. If you sold stock or another investment to raise the funds for the gift, you gain would be taxable. If you just took $13k out of your savings, that is not taxable and you need a new accountant.
i had a friend who worked for the irs and he said someone had a bell on their desk they would ring when someone actually filed a gift tax form. its basically the honor system and they get very few of those forms filed.
It seems the last time that I really got involved with 'gifts' was in the mid-90s. So that was what I was thinking of. I did not realize how long ago it had been. My Dw has pointed out my error.
i had a friend who worked for the irs and he said someone had a bell on their desk they would ring when someone actually filed a gift tax form. its basically the honor system and they get very few of those forms filed.
The main way they would catch you is if you had to file an estate tax return once your parents pass. If you sign that there were no prior gifts and you forgot that mom added you on title of her house 10 years before, you better hope they don't audit the estate return.
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