79 votes
Accepted

Taxes when transferring money

I would respond to your friend this way: "Either you are planning to do something illegal, in which case I don't want to be involved, or you are planning to do something legal, in which case you don't ...
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  • 45.2k
61 votes

Do I pay gift taxes in US, if I send money (>$15000) to my father in India?

What is considered a gift?Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return. https://www.irs.gov/...
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53 votes
Accepted

How could George Clooney have paid his friends' taxes?

Clooney may have been confused or misquoted. When he gives a friend a large gift, gift tax is owed. The giver pays this tax, not the recipient. Clooney would have been required to pay this tax. The ...
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34 votes

I am a Canadian resident who wants to gift my Adult US child CAD$175K. What are the tax implications?

The United States taxes gifts to the giver, not the receiver. Thus, in your case there would be no direct tax implications from the receiver so long as you are gifting cash and the cash is in Canada. ...
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  • 34.6k
32 votes
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Dad gifting me a house for 2 years, how to deal with taxes?

I understand $14k/yr $5.4M max This isn't the right way to say it. Your dad has a $5.4 million estate tax exclusion that can be used for gift tax. In addition to that (not instead or as part of), ...
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  • 20.8k
31 votes

I am distributing an inheritance based on verbal bequests. Is this considered a gift that must be reported to the IRS?

You say that you inherited the money from your mother, and are now paying these people using money that is already yours. Because of that, the money is considered a gift from you to them, and the ...
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31 votes
Accepted

Can you gift someone money for purpose of investing to avoid capital gains upon inheritance?

There are some issues with this plan: you have to trust they will do what you want with the money. you have to hope that they won't need it. you hope that the presence of this investment fund doesn'...
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28 votes
Accepted

How should my daughter give me money. Do I need to report it?

Your daughter can give you (and also as many other persons as she likes, for that matter) $14K or less each year as a gift without needing to file a Federal gift tax return. She does not have to ...
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28 votes

Does IRS count paying mortgage principal as taxable income from family?

Gifts are not taxable income to the recipient. In the US, gift tax is paid by the giver, not the recipient. However, there is an annual gift exclusion amount (currently $15,000/year). Any gifts under ...
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  • 62.9k
24 votes
Accepted

Tax implications of paying someone else's medical bills

Almost. In case (a) you would owe tax, not them. It is called "Gift tax" and is reported on form 709. It is related to the estate tax and you can use some of your estate tax exemption to ...
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  • 127k
23 votes

Avoiding estate tax by giving multiple gifts

If you give a gift with stings attached, then it isn't a gift. Thus it would be viewed as trying to get around the tax law. The law regarding this is the Step Transaction Doctrine. But a spouse can ...
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20 votes
Accepted

Can I pay my partner’s income tax (Canada)

There is no gift tax in Canada. Neither the giver nor the receiver have to pay tax on a gift (unless it's from your employer or something similar). There are a number of rules around income ...
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  • 29.9k
17 votes

Does Meghan Markle need to pay taxes for her stay at a billionaires house?

Canadian tax law is much simpler than the US. Canada does not have a "gift tax" either for the giver or the receiver, except for some very special cases. US gift tax is paid by the giver, not the ...
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  • 29.9k
16 votes

How should my daughter give me money. Do I need to report it?

While there are no direct tax issues when a US citizen gifts another US citizen under the 14,000 threshold in a year, but there may be some other issues to be considered. You do not have a job this ...
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15 votes
Accepted

How much in gifts can I receive per year in the US?

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 ...
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15 votes
Accepted

How does tax work with donations?

Donations, particularly those in the context of you providing a free service (software, libraries, etc.) are a notable grey area in tax code. Simply naming a button "Donate" doesn't necessarily ...
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  • 4,073
15 votes

What stops someone from abusing the Annual Gift Exclusion Amount?

Gifts are unconditional. Gifting someone money so he can gift it again on his name is not actually a gift. If discovered it would be fraud since you are giving your relatives money not as a gift to ...
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  • 2,425
14 votes
Accepted

Does Meghan Markle need to pay taxes for her stay at a billionaires house?

In the US the giver of gifts has the gift-tax obligation if any exists, not the recipient. Even if letting them stay at the house was considered to be a gift it wouldn't be relevant to the IRS if the ...
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  • 62.9k
11 votes

How much in gifts can I receive per year in the US?

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 ...
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11 votes

Can I gift money out of a UTMA account to my child's sibling?

UGMA and UTMA accounts are in the name of a single child(Your daughter), the funds are not transferrable to another beneficiary. There are strict rules governing UTMA/UGMA accounts. As a custodian, ...
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  • 172
11 votes
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Pay for my parent's PLUS loan - tax implications?

For a person to totally skip the gift tax provision, the money must be paid directly from the giver to the school. For example, if the grandparents want to pay for college they can send a tuition ...
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10 votes
Accepted

Is it possible to pay off a friend's debt without them being taxed on it?

There's no gift tax in the UK, so in general this won't be taxable to the recipient. The only exception is that the UK does have inheritance tax, and that can also apply to gifts given in the seven ...
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10 votes
Accepted

Is there a non-income tax way of my father paying off my house?

A few things come to mind: Gifts above $15,000 (raised from $14,000 in 2018) are not necessarily taxable. Gifted amounts over the $15,000 annual exclusion are applied toward the lifetime maximum of $...
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  • 113k
10 votes

Monthly bonus via cash or gift card?

A bonus isn't a gift, even if it's paid with a gift card. It's earned compensation, and it gets taxed as part of your salary. If it was a gift, the gift tax would be the responsibility of the giver, ...
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  • 5,323
9 votes

Giving kids annual tax free gift of $28,000

Why limit yourself to $28K per year? If you pay the tuition directly to the institution, it does not count against your annual or lifetime gift-giving totals. You could pay the entire tuition each ...
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  • 5,987
9 votes

Can yearly tax free gifts to a person in the U.S. be sent in multiple checks?

Gift taxes are owed by you, not the recipient, so you are the one that would need to keep copies of the checks.
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  • 3,997
9 votes
Accepted

Can yearly tax free gifts to a person in the U.S. be sent in multiple checks?

You can split the gifts as many ways you want. The 'one time a year' limit means that you cannot gift twice the limit in two installations and avoid the gift tax; the total value can be once per year ...
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  • 36.7k
9 votes

How could George Clooney have paid his friends' taxes?

"How is this possible? First of all, how did Clooney know everyone's tax rate, and second of all, if he paid the taxes for them, isn't that an additional gift - incurring yet additional [tyrannical] ...
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  • 20.8k
9 votes

What stops someone from abusing the Annual Gift Exclusion Amount?

You've got a good answer from @SJuan76, it is tax fraud. Since the annual gift exclusion amount is per person, if you are married you can gift your child 2x the annual exclusion amount. If your child ...
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  • 62.9k
9 votes

What stops someone from abusing the Annual Gift Exclusion Amount?

All steps of a process are considered in total for tax purposes. Under the Step Transaction Doctrine, the beginning-to-end of the process is considered: interrelated yet formally distinct steps in ...
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  • 5,067

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