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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1922
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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If a sibling were to give me 50,000 cash put into my bank account

Customer Question

If a sibling were to give me 50,000 cash put into my bank account towards buying a home, would they have to pay gift tax? They have not reached the 5.25 million exemption or come near it. What sort of penalty if any would they have to pay?
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.

Anne :

Hi

Anne :

Thank you for using justanswer.

Anne :

While there would be no actual tax due, your brother would have to file


Form 709 - Internal Revenue Service

Anne :

if he"gifts" more than $14,000 to more than 1 person per year

Customer:

Yes thank you I read about that. So as long as they file the form when doing taxes there is no penalty.

Customer:

They would incur no other expenses.

Anne :

that's correct

Anne :

Also

Customer:

Would the money transfer be concerning if the bank saw a large transfer in terms of money laundering?

Anne :

your brother could "gift" you $14,000, and gift your spouse, children, etc

Customer:

There is nothing illegal about my sibling transfering the money to me?

Anne :

and if your brother is married, his wife could do the same thing

Anne :

and possibly avoid filing the form 709 all together

Customer:

Unfortunately he has no spouse and I have no children.

Customer:

The 50000 in conjunction with submitting the form is not bad

Anne :

I don't think that $50,000 is going to raise much suspicion with the IRS

Anne :

and you would have the sale of home HUD statement anyway

Customer:

The only other issue is this, I live abroad and he lives stateside

Customer:

So the money would be intl transfer as I have no US address yet and no bank acct there anymore

Customer:

so I would likely buy from my foreign account when I am over to view

Customer:

Is this all okay?

Anne :

He is still bound by IRS rules (since he lives here) and will still have to file the 709 form

Customer:

I would put the money in escrow likely

Customer:

with an attorney there

Anne :

can you hold just a second....I can't think of the # XXXXX the other form

Customer:

ok

Anne :

The other form didn't apply to you....I didn't think it did, but just wanted to check to be sure

Anne :

He files the 709 form, and that's all he has to file

Customer:

ok so there is no real sticky wicket to worry about?

Customer:

the 50000 is all he has to lose, no more.

Customer:

he will be happy

Anne :

I've been doing this for 27 years....and I've learned NEVER to say never when it comes to the IRS, but I certainly wouldn't hesitate to send you the $

Customer:

i suppose another thing would be he could transfer the money to escrow, attorney handling transaction to save a step right?

Customer:

that would be smarter right?

Customer:

i like that idea better

Anne :

As far as IRS rules, as long as he fills out the 709, it doesn't matter

Anne :

however,

Anne :

if you look at the 709 form (link above) it appears it would be easier on your brother to send you the $

Customer:

really! wow thanks for telling me that. you have been great!

Customer:

i would think the contrary.

Customer:

can you tell me where it says that on the form?

Anne :

One would think so

Customer:

Is that like a skip?

Anne :

No

Anne :

Schedule A page 2

Anne :

asks for "Donee's information

Anne :

that would be you

Customer:

ok i shall read through thanks

Anne :

You're most welcome

Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1922
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Anne and 2 other Tax Specialists are ready to help you
Expert:  Anne replied 1 year ago.
Thank you for the accept and the excellent rating!

Please feel free to ask for me by name if I can help you in the future.

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Anne
Anne
Master Tax Preparer
1903 Satisfied Customers
Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses