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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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(state of Ohio) My mother inherited $150,000 from her sister

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(state of Ohio) My mother inherited $150,000 from her sister and has paid all the estate taxes. She now wants to give $75,000 to both myself and my sister. She has never gifted before and her estate before the inheritance was $100,000. Will she have to pay a gift tax or will we (adult children) have to pay income tax on the gift?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

How are you today?

MyVirtualCPA :

A gift tax is owed by the person giving the gift, if the amount is over $14,000 per year, per person. HOWEVER you can give away $5 million tax free during your lifetime

MyVirtualCPA :

so, there is a gift tax return due on the gift, but no actual tax will be due unless your mother has gifted over $5 million

MyVirtualCPA :

And, for you there is NO income tax on the gift

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