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taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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TEXAS my out of cournty sister gifted me $20,000. am i required

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TEXAS
my out of cournty sister gifted me $20,000. am i required to pay tax on this gift

in addition, if i want to gift all my siblings (other siblings who are in US) $30,000 each, must i pay tax
Submitted: 8 months ago.
Category: Tax
Expert:  taxmanrog replied 8 months ago.

Hi! Welcome to Just Answers! Thank you for the opportunity to answer your question. I will do my best to help!

 

If your out-of-country sister gifts you $20,000, there is no gift tax consequences to you. The person giving the gift is the one concerned with filing a gift tax return.

 

If you wish to give a gift to your other siblings, you can do so, but it if you plan on giving $30,000 in one gift, you will have to file a gift tax return. For 2013, the maximum amount you can give without having to report is $14,000. Any more than that, and you have to file a Form 709, the annual gift tax return. Amounts that you gift that exceed the annual gift tax limit reduce the estate tax deduction, which currently is $5,250,000. So giving the gifts to your siblings probably won't cost you anything now, but keep in mind that the amount you gift over the annual gift exclusion will reduce your lifetime estate tax deduction.

 

A good way to avoid this rule is to gift split - you can give $14,000 to your siblings and another $14,000 to their spouse. This means in effect you can gift $28,000. Your wife, if you are married, can do the same, gifting another $14,000 to your siblings and another $14,000 to their spouse. Therefore between the two of you, you can gift $56,000 to your siblings and their spouses.

 

The recipients of gifts NEVER pay tax on the gift.

 

I hope this answers your question. If anything is not clear, or if you have any more questions, please feel free to ask!

 

If my answer was helpful, please rate me highly, I would appreciate that!

 

Again, thanks and have a great weekend!

 

Roger

taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 342
Experience: Licensed CPA, MA, MST with 29 year's experience. Teach Accounting and Tax courses at Masters level.
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