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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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thank you ahead for your input My mother has a pine plantation

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thank you ahead for your input My mother has a pine plantation and gifted the proceeds to me and my sis, [under each one of our ssn], this year for a thinning because we both needed the money. we both around recieved 25,000 each . taxes were not auto deducted.I was laid off last year from my job,and have very little to live on much less to pay taxes with. Do you have any tips on how to file this? thanks again
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.
Hello suzanneclk,

Gifts are never taxable to the person receiving them.

Every individual is allowed a lifetime exemption on the amount of gifts they may give before any gift tax becomes due. In addition to the lifetime exemption of $1 million, individuals may give gifts each year up to a certain amount that do not require reporting and do not apply against the $1 million exemption. For the year 2008, that amount was $12,000.

If your mother gave you and your sister $25,000 each, she should report these gifts by filing Form 709 with the IRS. She will not owe any tax on the gifts unless she has already used up her $1 million lifetime exemption, but it is a reporting requirement.

You and your sister do not owe any tax on the gifts and you do not need to report the money as income.

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Thank you.

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