Today TaxMama hears from Bonnie in Alabama who asks, “How much money may I give my grown daughter before she is taxed?”
You can give your grown daughter as much money as your heart desires. She will never be taxed on gifts she receives.
You, however, may find yourself taxed. Gift taxes are paid by the person giving the gift – not getting it.
The good news is twofold:
1) You may give anyone up to $12,000 this year without facing gift taxes or having to file a Gift Tax Return – Form 709. Remember, gifts don’t just include money – they include anything you give her throughout the year – birthdays, holidays, etc.
So, if you’re looking for an excuse to limit your gifts to her – just tell her the limit is $12,000 per year.
2) However, if your goal is to give your daughter more than $12,000, you may file a gift tax return to cover any additional amounts. It will reduce your overall $1 million lifetime gift allowance.
This doesn’t refer to a million dollars that you may give each person. That’s a million dollars that you may gift to folks, in total – over and above the annual exclusion, per person.
If your total assets aren’t close to $1 million (or – $2 million, if your husband is still with you, don’t worry about it. Simply file the paperwork to go on record with any large gifts. There won’t be any taxes due.
And just be as generous with your daughter as you’d like to be.
And remember, you’ll find answers to lots of questions about gift tax and other tax information, free. Where? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips, too. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
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- IRS Form 709 :: Gift & Generation Skipping Transfer Tax
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