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Question

I will soon receive some retirement income in a chunk of about $18,000. I would like to give at least $5,000 to my daughter and know that I can give at least $12,000 without a "gift tax" being imposed. My question comes in as to how tax liable I really am for this money and can I somehow offset it on my income tax for this year. Is my daughter liable for any tax on this gift.

Submitted: 65 days and 19 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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Country/State/Province of question: New York

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Accepted Answer

You can give upto $13,000 per year to your daughter without being liable to gift tax or filing a gift tax return.

 

You will owe tax on $18,000 presuming this was a distribution from a regular retirement account. Giving a gift to your daughter does not reduce your tax liability. It does not offset the income. Your tax liability will depend on your total income, filing status and credits/deduction you may be eligible to claim.

 

Gift is not taxable to the recipient. hence, your daughter does not owe any tax on this gift.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

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Expert: RD
Pos. Feedback: 99.4 %
Accepts: 
Answered: 9/17/2009

Certified Public Accountant (CPA)

CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

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