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My dad received an inheritance from his mom. As part of the inheritance, she asked him to decide how much each of the granted should get. Since the money didn't come directly to me from the inheritance, my dad now has to give the money to me. It looks like I will receive about $50,000 from my dad, but he doesn't want to pay taxes on any of it. How can he give me the $50,000 without having to pay taxes since there is a limit on how much he can give each year.
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Your dad can give you 14K this year without worrying about taxes. If your dad is married, his wife can gift you an additional 14K this year without worrying about taxes. If you are married, your dad can gift your spouse 14K, and his wife can gift your spouse 14K this year without worrying about taxes. -
Actually, exceeding the gift limit just means you must file a Gift Tax Return. It does not necessarily mean you owe tax. Take a look at Form 709 and instructions.
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So as long as he fills out this paperwork, he won't owe ant taxes and neither will I?Originally posted by Petunia 100 View PostComment
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It depends. Print out the form and instructions, and ask your father to fill it out, as if he had given you 50k. Then see how it comes out. Then he can decide if he wants to do it in a single year or not.Originally posted by purplepen View PostComment
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IIRC, anything over the yearly tax-free max will be counted as part of the estate for tax purposes so if you are given $50k over the limit, on passing of the giver your share of his estate if 500,000 is counted as 550,000. I could be mis-remembering a conversation 15 years ago with my (NOW) B-I-L, my father and me. Since the estate was going to be quite a bit less than the tax-free max but the paperwork was not worth the extra, we poo-pooed the idea.Originally posted by purplepen View PostI YQ YQ RComment
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