What Is The Maximum I Can Give To Someone Without Them Paying Taxes?

fmdog44

Well-known Member
Location
Houston, Texas
The max used to be anything less than $10,000 will not require tax paid. I want to give some money to my niece but without her having to pay tax on it.
 

2021 limit on cash gifts without tax is $15,000.00 per person - that means if your niece, for example, is married with two children you are able to gift each person in that household $15,000 each for a total of $60,000.00.
 
The max used to be anything less than $10,000 will not require tax paid. I want to give some money to my niece but without her having to pay tax on it.
If it's a one time gift it can be in any amount and the IRS can't touch any of it. Ask your attorney if you have questions.
 
You pay the gift taxes, not the recipient. So give away!
From IRS Publication 559: "Example 1. The decedent gave his niece a cash gift of $8,000. It is his only gift to her in 2020. The gift isn't a taxable gift because it isn't more than the $15,000 annual exclusion."
 
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Oh - just to clarify that: The gift limit for 2021 is $15,000.00 per person, PER YEAR.
Yes, and and as I understand it if you have a spouse you can each give $15k, for a total of $30k.

And I believe it is also true that you pay the taxes on gifts, not the recipient. And even if you go over the $15k limit you don't necessarily pay taxes, but you may have to deduct those gifts from your eventual inheritance tax exemption. So if you want to give much money it gets complicated, I suggest engaging a tax specialist if that is what you have in mind.

Listening to people like me who probably have less expertise than they would like to think can be dangerous. But I am pretty sure the $15k/yr thing is real, stay under that and you should be fine.

Rob
 
Forbes wrote one of the best articles on the 2021 gift tax vs estate tax considerations:
IRS Announces Higher Estate And Gift Tax Limits For 2021v

From your link.


The Internal Revenue Service announced today the official estate and gift tax limits for 2021: The estate and gift tax exemption is $11.7 million per individual, up from $11.58 million in 2020. That means an individual could leave $11.7 million to heirs and pay no federal estate or gift tax, while a married couple could shield $23.4 million.

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We gave one of our sons $70,00.00 so he could pay off the mortgage on his house. We have to file a IRS form 709. No tax due by us or our son.

Our net worth is not high enough to worry about even if they reduce the estate and gift tax exemption.
 
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From IRS Publication 559: "Example 1. The decedent gave his niece a cash gift of $8,000. It is his only gift to her in 2020. The gift isn't a taxable gift because it isn't more than the $15,000 annual exclusion."
yes, and if any tax is due, you (donor) pay it. So, again, give away!
 
This is an area where I wouldn't EVER attempt to do anything without consulting an attorney skilled in this field of law. The trouble with everything involving or possibly involving the IRS is that it's a minefield and the smallest misstep can blow up in your face. Better to spend a few dollars on an attorney's advice ahead of time than to spend $$$$$s trying to clean up a mess.
 
Reading 559 disqualifies your post
Hmmm. From 559...

Estate and Gift Taxes This publication doesn't contain all the rules and exceptions for federal estate, gift, or GST taxes, nor does it contain all the rules that apply to nonresident noncitizens. If you need more information, see Form 709, Form 706, Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, Estate of nonresident not a citizen of the United States, and the related instructions. This publication also doesn't contain any information about state or local taxes. That information should be available from your state and local taxing authority. The discussion below is to give you a general understanding of when estate, gift, and generation-skipping transfer (GST) taxes apply

Excerpt from page 25...
Person receiving the gift or bequest. Generally, the person who receives a gift or bequest of property from an estate won't have to pay any federal gift tax or estate tax. Also, that person won't have to pay income tax on the value of the gift or inheritance received.

And yes, I admit my CPA license is inactive since I retired. Is yours still active?
 
Hmmm. From 559...

Estate and Gift Taxes This publication doesn't contain all the rules and exceptions for federal estate, gift, or GST taxes, nor does it contain all the rules that apply to nonresident noncitizens. If you need more information, see Form 709, Form 706, Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, Estate of nonresident not a citizen of the United States, and the related instructions. This publication also doesn't contain any information about state or local taxes. That information should be available from your state and local taxing authority. The discussion below is to give you a general understanding of when estate, gift, and generation-skipping transfer (GST) taxes apply

Excerpt from page 25...
Person receiving the gift or bequest. Generally, the person who receives a gift or bequest of property from an estate won't have to pay any federal gift tax or estate tax. Also, that person won't have to pay income tax on the value of the gift or inheritance received.

And yes, I admit my CPA license is inactive since I retired. Is yours still active?
Inactive=Revoked. You know what they call the graduate of medical school with the worst GPA? Doctor.
 
This is an area where I wouldn't EVER attempt to do anything without consulting an attorney skilled in this field of law. The trouble with everything involving or possibly involving the IRS is that it's a minefield and the smallest misstep can blow up in your face. Better to spend a few dollars on an attorney's advice ahead of time than to spend $$$$$s trying to clean up a mess.
You do not need a attorney to fill out a form 709. A CPA can do it. H & R Block can do it.
 
This is an area where I wouldn't EVER attempt to do anything without consulting an attorney skilled in this field of law. The trouble with everything involving or possibly involving the IRS is that it's a minefield and the smallest misstep can blow up in your face. Better to spend a few dollars on an attorney's advice ahead of time than to spend $$$$$s trying to clean up a mess.
I'm not particularly scared of the IRS, but recently had a CPA do our corporate taxes, as this is the first return since our incorporation, and I just want it all done right. Next year I may do the taxes myself, now that I have a correct template of our tax situation.
 


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