If a parent receives an inheritance and wants to give it to their children, is that money considered a gift and subject to being taxed?
- 9 months ago
I think i just found my long lost parent 😀
- curtisports2Lv 79 months ago
Gifts are NEVER taxable. A parent can give as much money as they want to anyone and the person receiving the gift never owes tax. Doesn't matter where the money comes from, as long as it's lawfully obtained.
The person that GIVES the gift is the one that has to account for things. A person may make a gift to as many people as they want, each year, in amounts up to $14,999, and not have to make an accounting for it. For any gifts in one year, to one person, that total $15,000 or more, the giver must file a gift tax RETURN with the IRS to REPORT the gift. Tax may never be owed. The total of the gifts you gave over your lifetime that you filed gift tax returns from is subtracted from your lifetime estate exemption of $11.4 million. If you gave away that much in gifts over your lifetime and you still had an estate to leave, then every penny of what you leave will be subject to estate tax.
Most people that do have to file gift tax returns never pay a penny of tax, because most people don't have estates that large.
- JohnLv 69 months ago
The amount given away by the parent would be a gift. Gifts only become taxable (and only to the giver), if the giver makes reportable gifts totaling over $11.2M. Reportable gifts are those exceeding $15K per year to one person.
- SlickterpLv 79 months ago
It is a gift, whether or not it is taxed depends on the size of the gift and what they have given during their lifetime, etc
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- AmyLv 79 months ago
Each parent can gift each child up to $15,000 per year with no tax consequences.
Beyond that limit, gifts start to count against your own estate exemption - which means they usually still aren't taxed, but you do have to report them.
- StephenWeinsteinLv 79 months ago
Yes, it is. However, gifts are subject to tax only if more than a certain amount is given during a year. If the parent gives it gradually, at, say, $10,000 per year, then the tax can be avoided.
- PearlLv 79 months ago
i would ask the irs this question
- JudyLv 79 months ago
It would be a gift to their children.
- EvaLv 59 months ago
A parent can give the child $15,000/yr without incurring any tax liability. The taxes are paid by the giver, not the receiver, and only come into play once the lifetime gift exclusion limit has been reached. If they give over the 15,000 threshold, a gift tax return must be filed, but there is no tax due.
- L. E. GantLv 79 months ago
Yes, and yes...............................................