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I want to give my brother a cash gift in the amount of $50,000 (he needs to make a down payment on a house he wants to get a mortgage for). It is my understanding that I don’t need to report the first $15,000. But then I’ll have to pay taxes on the rest of the amount.

How much will I pay in taxes?

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  • Of course you could loan him the money. Then when he doesn't pay it back, it might be deductible as a bad debt :-)
    – jamesqf
    Commented Feb 4, 2021 at 4:26
  • @jamesqf: "Genuine debt required. A debt must be genuine for you to deduct a loss. A debt is genuine if it arises from a debtor-creditor relationship based on a valid and enforceable obligation to repay a fixed or determinable sum of money." See also xkcd.com/1494
    – dave_thompson_085
    Commented Feb 5, 2021 at 5:06
  • @dave_thompson_085 "jailhouse lawyers" (aka people looking for loopholes) have existed for a lot longer than computer programmers.
    – RonJohn
    Commented Aug 3, 2021 at 19:13

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Nothing. If you and he are married, couple to couple multiplied up to $60K/yr.

If you’re both single, the $35K excess is report on Form 709 and goes against your lifetime exemption, which is over $11M. You can gift $100K/year and never use up all of that exemption.

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  • To add a little detail here: you can give $15k to him, and $15k to his wife. Your wife can also give $15k to him and $15k to his wife. $60k total, tax free. If you're single then you can give $15k to your mom, and she can give $15k to him. Etc.
    – Matthew
    Commented Feb 4, 2021 at 3:59
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    I read your first sentence as "if you and he are married [to each other]" at first, which was an odd thing to read about one's brother on SE... 😅
    – grfrazee
    Commented Feb 4, 2021 at 4:09
  • Thank you. We are both single though ;(
    – user105240
    Commented Feb 4, 2021 at 4:10
  • @JTP - Apologize to Monica I am single and my brother is single. So I’ll have to report $35,000 in Form 709, but there are no taxes right? Also, would it be possible if I gave $10,000 to 5 other relatives, and they gave it to my brother? Would this trick work? Will I still have to file Form 709?
    – user105240
    Commented Feb 4, 2021 at 4:16
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    Well, since the form is just a few minutes in paper, with no tax due, but the proposed going through multiple people is called “structuring” and is considered potential tax fraud, I’d warn against it. On reflection - It's more likely subject to the Step Transaction Doctrine with the same net effect, disqualification.
    – JTP - Apologise to Monica ♦
    Commented Feb 4, 2021 at 4:20

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