How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Richard Your Own Question
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 53664
Experience:  29 years of experience as a tax, real estate, and business attorney.
Type Your Tax Question Here...
Richard is online now
A new question is answered every 9 seconds

Hi. I have a question regarding gift tax. I am starting a business

This answer was rated:

Hi. I have a question regarding gift tax. I am starting a business and my parents are considering a request to help me begin with a $50k cash gift. We live in California.

I have researched the gift tax laws and this is what I have learned. It appears that as of January 1, 2013 parents may give a cash gift of $28,000 without paying any gift tax. That's $14,000 for each parent. But I also read that any amount exceeding the $28,000 annual gift tax limit can also absolve the givers of paying taxes on their gift if the givers (my parents in this case) apply the balance to their LIFETIME UNIFIED CREDIT which appears to be up to $5 million.

Therefore, looking at a $50,000 (early inheritance) cash gift, $28,000 cash would be exempt from the gift tax and $22,000 would be applied to their $5 million unified credit.

I have 2 questions:

1) Is the above information correct?
2) What tax liabilities do I face, as the RECIPIENT of a $50,000 gift from a relative?

Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good evening. 1) That is correct....except the lifetime credit has been raised to $5,250,000 per between the two of them they could give up to $10,500,000 without any gift tax. They will need to file a gift tax return however for amounts over the $28,000 to show the IRS how much of their lifetime exemptions they are using. 2) You have no gift tax or reporting requirements as a recipient of a gift.

Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!
Richard and other Tax Specialists are ready to help you
Thank you so much for the positive rating! I appreciate having had the opportunity to serve you! If I can be of assistance to you in the future, just look me up and I will be happy to help! For easy access, my bookmark is:

Related Tax Questions