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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2320
Experience:  IRS licensed Enrolled Agent and tax instructor
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My dad died a month ago. Can my mother give me 225,000 to

Customer Question

My dad died a month ago. Can my mother give me 225,000 to help me buy land to build a house. What kind of taxes will we have to pay. Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you.
The transaction will be considered a gift. The gift tax, if any is paid by the donor, not the receiver, so there will be not tax due to you.
You mom will have to file gift tax return, form 709. 709 is just an informational form to track her lifetime gift. Lifetime gift tax exclusion is currently 5.43M, which means unless she already gifted more than that, there will be no gift tax to pay.
I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.
Customer: replied 1 year ago.
Ok thanks so her exclusion is 5.4 mil. So since my dad died she doesn't have his exclusion I assume? He made all the money in the family. This money will likely come from life insurance and money left to my mom.
Expert:  emc011075 replied 1 year ago.
No, there's no joint exclusion or transfer of exclusion. Everybody has its own. The exclusion is adjusted for inflation every couple of year. What it means that people who die in 2015 have 5.43M estate tax exclusion and this include lifetime gifts.
If the money was treated as inheritance to you, there would be still no tax (inheritance is nontaxable) and she would only need to file gift tax return if she gifted you more than 14,000. But if she inherited the life insurance policy and all joint bank accounts, what she gives to you is treated as gift.