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After reading IRS Pub 950 it appears one couple can gift another couple up to $56,000 per year. My question, how much can one receive per year?

For example, take my girlfriend and me: Can we receive $56k from my parents and also $56k from her's without trigging a taxable event? Or perhaps a better question is, does this burden always fall on the donor, and never the donee?

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    Here are a few non-tax situations: If the recipient is going to be getting a mortgage in the near future expect that the lender will require an affidavit that the money is a gift and not a loan; If the donor will soon be attempting to qualify for medicaid the governemnt can delay the eligibility due to gifts given during the look back period; It can also impact financial aid calculations if the recipient is of college age. – mhoran_psprep Apr 23 '14 at 12:03
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Under current US tax code, you can receive $14K from an unlimited number of people with no tax consequence to them.

Yes, the burden is on the giver.

There's an exception to most rules. If I gift you a large sum and don't fill out the required paperwork, paying the tax due, the IRS can go after the recipient for their cut. "Follow the money" is still going to be applied.

Even if over $14K, a tax isn't always due. Form 709 is required, and will allow a credit against one's lifetime gifting, currently $5.34M. In effect, the current limits mean that 99%+ of us will never worry about this limit, just file the paperwork.

Last, the 529 College Savings accounts permit a 5 year look ahead, i.e. a parent can deposit $70K to jump start her child's account. Then no gift for next 4 years.

  • So there are two numbers floating around now: $56k and $14k. Which number applies to which party in the gifting? – dg99 Apr 23 '14 at 15:56
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    @dg99 - 4 x $14 = $56. Couple to couple is 4 gifts. – JTP - Apologise to Monica Apr 23 '14 at 15:57
  • Great answer, particularly re filling out a gift tax return - get it locked down now so that the statute of limitations has run by the time the giver dies (and IRS can't challenge it). A tax lawyer is highly recommended to make sure there are no errors on the return, which may toll the statute. There are also exceptions for payments straight to educational institutions or healthcare providers. Reimbursements are not exempted from gift tax; they must be direct payments to the providers. – NL7 Apr 23 '14 at 20:56
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In the US, gift tax always falls on the donor, never the recipient, and gifts are not taxable income to the recipient. The IRS could raise questions if there is an employer-employee relationship between donor and recipient; your employer cannot give you money or property (e.g. a Rolex watch) or benefits (e.g. a house to live in rent-free) and claim that it is a gift, so that you do not have to pay income tax on that money. But, your parents need to be careful; that $14K per person is the exemption for the whole year and once they give you that, anything extra (birthday present, Christmas present etc) is subject to gift tax (for them) though you can still enjoy your gifts without any tax issue.

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If you need to transfer a larger amount than the $14K/person/person limit, one accepted workaround is to structure it as a loan, then gift the payments over the duration of the loan. There are "intra-family mortgage" companies which specialize in setting up this kind of transaction. Note that this doesn't allow you to give more without penalty, it just lets you transfer the actual cash earlier, in exchange for some bookkeeping overhead and some fees for the legal processing and mortgage registration.

protected by Chris W. Rea Nov 12 '17 at 17:53

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