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80 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 ...
TTT's user avatar
  • 47.2k
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/...
Acccumulation's user avatar
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 ...
Ben Miller's user avatar
  • 116k
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. ...
Joe's user avatar
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34 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), ...
Brythan's user avatar
  • 21k
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 ...
JTP - Apologise to Monica's user avatar
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'...
mhoran_psprep's user avatar
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 ...
Hart CO's user avatar
  • 70.5k
24 votes
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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 ...
littleadv's user avatar
  • 176k
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 ...
mhoran_psprep's user avatar
20 votes
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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 ...
DJClayworth's user avatar
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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 ...
DJClayworth's user avatar
  • 33.4k
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 ...
SJuan76's user avatar
  • 2,545
14 votes
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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 ...
Hart CO's user avatar
  • 70.5k
10 votes
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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 ...
GS - Apologise to Monica's user avatar
10 votes
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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 $...
D Stanley's user avatar
  • 136k
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, ...
Pete Becker's user avatar
  • 5,502
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 ...
dg99's user avatar
  • 6,037
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.
zeta-band's user avatar
  • 3,997
9 votes
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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 ...
Aganju's user avatar
  • 37.7k
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] ...
Jay's user avatar
  • 22.8k
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 ...
Hart CO's user avatar
  • 70.5k
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 ...
Magua's user avatar
  • 5,097
9 votes
Accepted

Gift tax on receiver's side?

the receiver is a rich person who earns more than 100K. So does he have to pay tax even if my gift value is less than 14K just because he is rich or he earns more? In the United States, gift taxes ...
RonJohn's user avatar
  • 50.7k
8 votes
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Is it a gift or not?

There are a few things that this question prompts - The step transaction doctrine. I wrote a full page on it, but it's defined as "In short, the tax liability should be determined by viewing the ...
JTP - Apologise to Monica's user avatar
8 votes
Accepted

Selling Gifted Stock - Capital Gains, Gift Tax, AGI/Deductions

Basis, and purchase date follow the gift. This matter is of no concern to you, the person(s) gifting need to file paperwork. Not quite. The gain is long term, 15% (As a result of your income, and ...
JTP - Apologise to Monica's user avatar
8 votes

How is "fair market value" determined?

Is the value of the gift considered the retail purchase price or the appraised value? It is the appraised value. See the IRS's Frequently Asked Questions On Gift Taxes If the gift is very expensive,...
Magua's user avatar
  • 5,097
8 votes
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Apartment from non-US parent abroad

It will not be zero for either case. For gifts the basis is determined based on the donor's basis, with some adjustments. See details at the IRS page on basis for gifted property. For inherited ...
littleadv's user avatar
  • 176k
7 votes
Accepted

Do political campaign contributions count as gifts for tax purposes?

No. No. No. Standard federal candidate political donations are limited to $2700 per candidate per election. The primary and general elections are different elections for this purpose. Source: ...
Brythan's user avatar
  • 21k
7 votes

Dad gifting me a house for 2 years, how to deal with taxes?

I think the cleanest way to do this is to rent the house from your father for 2 years, possibly adding an option to buy at a set price to the lease agreement. That takes care of any gift issues, and ...
D Stanley's user avatar
  • 136k

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