Gift tax rules
in any state
, follow the same guidelines as the federal tax laws
Under current law, each taxpayer is allowed to give gifts of up to $1 million in their lifetime before any gift tax is due. Taxpayers are also allowed to give annual gifts of up to $13,000 to any one individual
, without that gift counting towards their lifetime exemption.
If you give someone a gift which exceeds the annual exclusion of $13,000, then you must report the value of the gift by filing Form
709 with the IRS
. There is not actually any tax
due with the form if you have not already exhausted your $1 million lifetime gift allowance
, but you would be required to report the gift, and it would then reduce your remaining lifetime limit.
So if for example you are buying a house for $200,000 and giving half of it to your partner, then you would file Form 709 and report that you gave him a gift valued at $100,000. But neither of you would owe any tax on that transaction
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