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Updated: 2016-10-28T00:42:11+00:00


You are never going to pay a gift tax


Every single day someone comes in here and asks about ridiculous monetary-gifting workarounds to avoid paying gift tax. Unless you come from a very wealthy family, gift tax is not something you are ever going to have to think about in your lifetime.

You can gift up to $14k per person without reporting anything. That means a married couple can gift a married couple $56k before any reporting is done.

The giver has to report all gifts above $14k per person per year. Report, not pay taxes on. That's done on IRS form 709.

Above $14k per person per year, you can give away $5.45M in your lifetime without incurring any sort of gift tax.

Only once you have given away $5.45M above the $14k per person per year does gift tax come in to play at all, and then gift tax is paid for by the giver, not the receiver.

So take that down payment from your parents, no one is going to tax anyone on it.

There are of course edge cases and scenarios, but odds are you'll be aware of those if you're gifting at the frequency or quantity where they apply. The moral of the story is that if someone wants to give you a large amount of money, you as the recipient don't have to worry about anything.

submitted by /u/thecw to /r/personalfinance
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