I need to send $28000 to my brother in India. I pay the necessary federal and state taxes in the U.S. Can I send this money in a period of one calendar year without paying gift tax? Can I send $14000 each from me and my wife to my brother and his wife respectively? My wife does not earn any income.
You have (at least) two options:
You can send $14k to your brother and $14k to your sister-in-law as two separate cheques without incurring Gift Tax liability in the US.
Both you and your wife can send $14k to your brother (as two separate cheques) without either of you incurring Gift Tax liability. In your wife's case, gifting does not require earned income, simply available assets.
(Even if the husband's and wife's property are considered separate, and the money the wife wants to gift was originally earned by the husband, there is no problem as you are allowed to transfer assests in any amount1 to one's spouse).
More information of U.S. Gift Tax can be found at this IRS page, including a link to the Instructions for Form 709 (PDF). In most cases, you would only need to file this form if a gift would attract Gift Tax, but there are some exceptions.
1 There is a $149,000 limit in the case of a spouse who is not a U.S. citizen.
Yes, in 2018, you can send $30,000 to both your brother and his wife ($60,000 total) without paying gift tax, as long as you and your wife are both U.S. residents (or citizens). It is not necessary to send separate gifts from you and your wife, but you may need to send separate gifts to your brother and his wife.
From the instructions for Form 709:
If you and your spouse both consent, all gifts (including gifts of property held with your spouse as joint tenants or tenants by the entirety) either of you make to third parties during the calendar year will be considered as made one-half by each of you if all of the following apply.
- You and your spouse were married to one another at the time of the gift.
- If divorced or widowed after the gift, you did not remarry during the rest of the calendar year.
- Neither of you was a nonresident not a citizen of the United States at the time of the gift.
- You did not give your spouse a general power of appointment over the property interest transferred.
If this choice is made, it applies to all gifts made during the year.