Christian Posted March 20, 2015 Report Share Posted March 20, 2015 (edited) A client wants to give $14,000 each to two nieces this year. Is the $14,000 limit what can be given by a person each year? Or, is it the limitation on how much he can to each person. I read it to mean he can give $14,000 to any one person which means if he wants he can give $14,000 to as many folks as he wishes. Edited March 20, 2015 by Christian Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 20, 2015 Report Share Posted March 20, 2015 $14K to each person without having to file a gift tax return. 1 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 21, 2015 Report Share Posted March 21, 2015 $14k per person per year with no gift tax form requirement. If married, spouse can also give the same amount. In your example, if the taxpayer is married, each niece can be given $28K per year with no tax consequences on either side. NOTE: The recipient of a gift NEVER pays taxes on the gift. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 21, 2015 Report Share Posted March 21, 2015 $14k per person per year with no gift tax form requirement. If married, spouse can also give the same amount. In your example, if the taxpayer is married, each niece can be given $28K per year with no tax consequences on either side. NOTE: The recipient of a gift NEVER pays taxes on the gift. You know, I just love it when people use absolutes when making statements such as this. It's true that the gift tax is imposed on the donor, but... ...a taxpayer who makes a gift of property on condition that the donee pay the resulting gift taxes, the donor then realizes, and must recognize, a gain to the extent that the gift taxes paid by the donee exceed the donor's basis in the property. (reference is V.P. Diedrich, SCt, 82-1 USTC para 9419) And this from the IRS website on gift taxes: "The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement." 1 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted March 21, 2015 Report Share Posted March 21, 2015 I read the OP to say $14K. No property was mentioned. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 21, 2015 Report Share Posted March 21, 2015 I read the OP to say $14K. No property was mentioned. Maybe not in an accounting concept, but the legal concept of cash is that it is considered personal property, especially when talking about one's estate, and gift and estate taxation centers on that. It's covered in code sec 2511 and reg sec 25.2511-1(a ) where it says: § 25.2511-1 Transfers in general. (a) The gift tax applies to a transfer by way of gift whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible. For example, a taxable transfer may be effected by the creation of a trust, the forgiving of a debt, the assignment of a judgment, the assignment of the benefits of an insurance policy, or the transfer of cash, certificates of deposit, or Federal, State or municipal bonds. Statutory provisions which exempt bonds, notes, bills and certificates of indebtedness of the Federal Government or its agencies and the interest thereon from taxation are not applicable to the gift tax, since the gift tax is an excise tax on the transfer, and is not a tax on the subject of the gift. 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 21, 2015 Report Share Posted March 21, 2015 I think what the OP wants to know is if he can give as much as he wants to as many people as he wants -- and that answer is Yes. Then if he keeps it to $14,000 PER PERSON, will he avoid filing a gift tax return -- and for most cases that answer is also Yes. And, he didn't ask, but if he goes over $14,000 per person (gave them a birthday/holiday gift plus $14,000, for instance) what happens -- gift tax return, exclude the $14,000 per person, but unless he's used up his lifetime limitation, no tax is due, as the excess simply reduces his lifetime limit. Now, as Judy as said, that's the simple answer; but if your client is doing something less simple (giving property and the donee takes over a mortgage/liability or any of the more detailed transactions Judy mentioned) then the answer becomes less simple real fast. So, strongly tell your client to get back to you BEFORE he gives large gifts. 2 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 21, 2015 Report Share Posted March 21, 2015 I wish somebody would give me a gift of 14k. Or gasoline with FMV 14k. Or Cadbury mini eggs. Ok, carry on. 2 Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted March 22, 2015 Report Share Posted March 22, 2015 Rita, you have mentioned Cadbury mini eggs so many times lately that I finally broke down and bought a bag to try. Like I needed another addiction. 2 Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 22, 2015 Report Share Posted March 22, 2015 Rita, you have mentioned Cadbury mini eggs so many times lately that I finally broke down and bought a bag to try. Like I needed another addiction.Life is full of regrets. We can use one more. 1 Quote Link to comment Share on other sites More sharing options...
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