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Shane-CPA
Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience:  Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
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If I want to make a cash gift to my daughter who is an adult

Resolved Question:

If I want to make a cash gift to my daughter who is an adult of $400,000 as a one time lump sum gift does she or I have a gift tax to pay? Also, how do I report it for record purposes?
Submitted: 1 year ago.
Category: Tax
Expert:  Shane-CPA replied 1 year ago.

Shane-CPA :

Hello...my name isXXXXX and I am a Certified Public Accountant. I look forward to assisting you with your tax question.

Shane-CPA :

The "Taxpayer Relief Act" signed on January 2, 2013, permanently sets the estate and gift tax exemption at $5,000,000 and the top tax rate at 40%. The exemption amount is adjusted annually for inflation, which puts the 2012 exemption at $5,120,000 and the 2013 exemption at $5,250,000.

Shane-CPA :

Basically that means that you will not have to pay gift tax unless the amount of your lifetime gifts exceed the $5,000,000 amount (adjusted for inflation). However, you will need to file a gift tax return for 2013 such as Form 709 with the IRS to report the amount of gift made which will reduce your $5,000,000 (inflation adjusted) exemption by the amount of the gift.

Shane-CPA :

In addition, you can give up to $14,000 per year per individual without having to file a gift tax return and without it reducing your lifetime gift exemption of $5,000,000 (inflation adjusted).

Shane-CPA :

I hope this helps to answer your tax question. If I can provide you with any additional assistance or clarity, please let me know.

Shane-CPA :

If this answers your question to your complete satisfaction, then I thank you for allowing me to assist you and I look forward to helping you again in the near future. Please provide me with positive feedback so I may receive credit for my response. In addition, if you feel exceptional service was provided, bonuses are greatly appreciated. Thank you for using Just Answer and I hope you have a great day!

Customer:

You have been very helpful. I was concerned that she would have to pay gift taxes and I knew about the $5,000,000 one time gift but didn't know how to report it and/or if had to pay any taxes on the gift. Again, thankyou for your help. I'll probably be getting back to you from time to time as we wrap up our estate and prepare it for payout at death.

Shane-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 265
Experience: Shane Northrop is a Certified Public Accountant, Personal Financial Specialist and a Chartered Global Management Accountant
Shane-CPA and 3 other Tax Specialists are ready to help you

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