Offer gifts without having the liability of tax

jenkin7 · Posted: Tue Oct 13, 2009 11:59 pm Post subject:

Hi john,

Your parents are liable to pay gift tax on the amount of money they gifted you. The annual gift tax exemption limit for the year 2009 is $13,000. So, your parents will be liable to pay tax on the amount of $37,000. However, a person is also entitled to a life time gift tax exemption limit of $100,000. Thus, your parents will not have to pay any taxes for the gifted amount. The taxes will be adjusted with the annual as well as the lifetime gift tax exemptions.

Guest

So my husband's grandmother could gift us land worth $20,000 (we believe, there is nothing that states this except what we thing) with no tax implications because technically she gifed $10,000 to him and $10,000 to me? Or should we just say the value of the land is $12,500?

savior70 · Posted: Tue Nov 10, 2009 5:02 am Post subject:

Hi,

The annual gift tax exemption applies to gifts that does not exceed $13k limit. Since your husband's grandmother will be gifting $10k to each of you and your husband, she will actually be gifting $20k, which exceeds the exemption limit. But there's a lifetime gift tax exemption of $1million allowed to each individual. The gift amount in excess of the annual exemption can be adjusted with the lifetime exemption.

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