Anyone know about gift taxes?

[luvwinnie]

Is there a limit...example: my parents sold their home and want to give each of us some of that money. Will will be taxed on it? Thanks.

 

[Meriweather]

Not sure if it is the same everywhere, but my MIL's accountant told her $10,000 is the limit (to each person).

 

[EROS]

EACH parent can give you $10,000 tax-free. Thus they could give you $20,000 as a couple ...........

 

[CarolG]

According to this IRS Publication the annual exclusion for an individual gift for 2002 is $11,000 per gift. So your parents could give each child $11,000 this year and you would not pay taxes on the gift. They could also then give each of you another $11,000 January 1, 2003.

There's also a section in this publication that talks about "gift splitting". I hadn't heard of this before. Properly documented, your parents could each give each child $11,000 per year - a total of $22,000.

 

[Dan Murphy]

This may help explain a it for you. $10K amount is now $11K for 2002.

http://www.nolo.com/lawcenter/ency/...F17/catID/257899BC-C5FA-435D-BA9BCC083F55357E

 

[luvwinnie]

still doesn't seem RIGHT that they can tax money that belongs to MY parents though!

 

[aahmom1]

You think that's bad, take a look at inheritance tax.

 

[Tina]

They're not taxing money that belongs to your parents, they are taxing money that you are receiving as unearned income.

 

[bsnyder]

The person gifting the money is taxed, not the person receiving the money.

And luvwinnie, if you have children, each of your parents can give each of them $11,000 per year (in a gift to minors account), without paying gift tax. Another way to increase the total amount that can be passed on, tax free, annually.

 

[Toby'sFriend]

I agree with luvwinnie in that the gift tax is a disgrace. I also don't like Estate Taxes.

 

[luvwinnie]

Have you ever had to help your parents clean out their house after 32 years and move them to another place??? WHAT WORK!

LOL

 

[brerrabbit]

The amount changed this year to $11,000 but remember that that counts against the one time exclusion ( which is usually what they leave in their will upon their death). That amount is something like $600,000 each for husband and wife meaning a total of $1,200,000 if they both die at the same time. It gets complicated when one dies, leaves everything to the surviving spouse and then they die with all the assets.

Of course in most families as with mine the chances of leaving over the $600,000 limit is not real good. However, this could be a problem with some families. Also the tax is charged to the estate of the person giving the money, not the receiver.