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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29535
Experience:  Taxes, Immigration, Labor Relations
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If I give my child a gift sum that I have taken out of my

Customer Question

If I give my child a gift sum that I have taken out of my annuity, am I taxed? How do I show on my income tax form that it is a gift?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

These are two separate issues - (1) distribution of your annuity and (2) gift to your child.
Distributions from annuity are reported as taxable income on form 1099R. You will include taxable amount in your tax return regardless how proceed are used.
So - if you expect to deduct that gift and reduce your tax liability - that is not correct expectation.
You may ONLY deduct gifts to qualified charitable organizations. Gifts to specific persons - either related or not - may NOT be deducted on your income tax return and are not reported.
For your child the gift is NOT taxable income - the statute specifically excluded gifts from income taxes.
So - your child will NOT report the gift from you
However - as a donor - you might be responsible for gift taxes - that is different from income tax.
A gift up to $14,000 per person per year is NOT taxable and is not reported.
If you gift is more than $14,000 to any single person - you would be required to file a gift tax return - from 709.

However - there would not be any gift tax liability as long as you do not reach teh lifetime limit of $5,430,000 (for 2015)

Let me know if any clarification needed.