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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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My mother wants to gift 50K to each of her children. What

Customer Question

My mother wants to gift 50K to each of her children. What will be the tax consequence to the gift?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

There will be gift tax reporting requirements - but most likely - there will NOT be any gift tax liability.

Expert:  Lev replied 9 months ago.

In the US - gift - is not taxable income for the recipient and you do not need to report it on the tax return.

There is no any amount limit.It does not matter how the gift is transferred - as long as that is a gift - there is NO income tax liability.

Please see for reference IRS publication 525 -

http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you..

Expert:  Lev replied 9 months ago.

.

Another issue with gift tax...

Regarding your situation - if the donor (gifter) is an US person - the gift is reported on the gift tax return.

The gift below $14,000 is not taxable gift but when the gift is above that threshold - it is reported on the gift tax return - form 709.

Regardless - there will NOT be any gift tax liability as long as the lifetime limit is reached - that limit is $5,430,000 (2015), and $5,450,000 (2016).

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