Yearly or lifetime IRS limit on giving (gifting?) money to other persons?

snipped-for-privacy@gmail.com posted:

I hope you'll understand, Denise, that I didn't continue with your entire list of options, because the answer is very clear and simple: At the present time, you may give a gift up to $12,000 to any individual _every year_ without incurring any gift tax liability, and without any need to report such gift. For the recipient, there is never any obligation to report gifts

-- and no tax is ever due. Furthermore, if you're married, you and your spouse can _each_ give $12,000 -- for a total of $24,000 to any individual, each year. (If, for example, you wanted to give a gift to your married child, you could actually combine to give the couple a total of $48,000 -- $12,000 to each of them, from the two of you -- without any tax or report due.) Each year starts anew, so long as you do not exceed the limit. (And if you do, there is some reporting required -- but the net effect is to reduce the estate tax limitations for the particular beneficiary involved. If that were the case, you should consult your attorney -- but no immediate tax liability would be incurred.) Bill

(snip every permutation offered)

In 2007 and 2008, you may gift $12K each year to any number of recipients you wish. (It was 10K, then 11K, a few years back, now $12K) Any amount over $12K requires you to file a form 709, which you can get from IRS.gov . You then may pay the gift tax or take a credit against your lifetime unified gift amount, $1M and avoid taxes. There may also be an issue of gifting too much to recipient more than one generation beneath you, but that does not impact the $12K gift, only larger ones. There are some minor variations on this theme, for example, if you open a 529 college savings account, you may gift 5 years' deposits in advance, so $60K. But then, no gifting anything to that recipient for next 4 years. Gifts to charities are tax deductible, if you itemize, gifts to individuals are not. If you are beyond the $12K, and used up that $1M above, you may want to consider converting IRA money to a Roth IRA. Inherited IRAs are subject to both estate tax, and then, income tax upon withdrawal by the beneficiary. A Roth is not taxed on withdrawal, so this strategy can be used to reduce your estate if you are pushing the limit, and to leave a better inheritance if that's your wish. If this doesn't answer the question in full and then some, likely, another response will. Given the complex tax laws, this topic tends toward the straightforward. JOE

wrote

Nope. TherE are no limits set by anyone on making or receiving gifts of any amount. That being said, if the annual gifts made to any one individual exceed $12,000, then a gift tax return must be filed by the person making the gift. No gift tax is due however, until the person making the gift exceeds their lifetime exclusion.

-- Paul A. Thomas, CPA Athens, Georgia

There is no limit to how much a person can give to another person. However, there are tax or filing implications at certain threshholds. You may give up to $12,000 per person per year, without any gift tax or filing considerations. If the person is married, double that. If you are married, and your wife agrees to the gift, double that. Gifts over $12,000 per person per year will require you to file a gift tax return. There is a lifetime exclusion (your lifetime) of $1,000,000 of gifts - over the $12,000 per person per year. Even though you would be required to file a return for gifts over $12,000, you would owe no tax until the lifetime exclusion is exceeded. The receiver of the gift does not owe tax, regardless of the amount.

If you like you can give hundreds of people gifts of up to $12,000 (current limit, could change), each, without having to file a gift tax return. Your lifetime giving has to do with gifts you've given which exceed the allowable amount, each year, to any or all of the individuals, individually.. If the limit exceeds gifts to any one individual, or any # of people (individually) only amount of that gift which exceeds the $12,000 (or allowable limit for a particular year) would be subject to the gift tax rules. Here are some qualifiers which you may find useful:

No.

But if you give enough, the amount shielded from estate tax when you die is reduced, and if you really give enough, *you* have to pay gift tax on what you give.

Yes, sort of.

No.

No.

Yes.

Yes.

No.

No.

Yes.

Whether or not a gift is taxable depeneds on whether or not you go over the annual per-recipient threshold in a particular year, but how much your estate tax exemption is reduced (or how much gift tax you pay if you've zeroed your estate tax exemption) depeneds on *your* lifetime total of taxable gifts. See Forms 706 and 709 and their instructions.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

Short answer: No. There is no limit. There may, however, be tax consequences. Rather than answer your detailed questions, I will just explain the rules and leave the application of them to those questions as an exercise for the reader.* There is a general rule and then there are some important exceptions. The general rule is that you can give as much as you wish to anyone. The amount you give above an annual per person threshold, however, can trigger the need to file a "gift tax return." You also have a lifetime combined gift/estate tax credit amount. If you give more than the annual threshold, you file a return and begin using up the gift/estate tax credit amount. Once that lifetime credit is exhausted, you (or your estate) will have to pay tax on any gifts or (after death) bequests. IIRC the credit currently appliles to $2 million, but I can't quite remember if there is a different value for gift and estate purposes. This is currently in a fair amount of flux, since there are annual changes (and

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