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This question is for Maverick: Hello, in continuation to my last question about joint tenantship between son and father, I would like to know since son is contributing 28k instead of 77k which is half of his own share, do you think he can receive gifts of $28k from both parents, and rest of 21k from grandparents to make up for his 50%, without having to do an S corporation.
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Answered in 15 minutes by:
6/28/2016
Maverick
Maverick, Attorney
Category: Legal
Satisfied Customers: 6,427
Experience: 20 years experience as a civil trial and appellate lawyer
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Yes, if you are trying to avoid gift taxes, that is no problem here. As a general rule, Maryland and most all other states do not impose taxes on gifts. The federal government does, however, your scenario fall under an exclusion. Under federal law, each person may give away up to $5.25 million throughout his/her lifetime, or up to $14,000 a year to any number of recipients, without paying a cent in gift taxes.

In your case 14k from mom and 14k from dad = 28k; and about 11k from each grandparent makes up the balance and none of you would pay a gift tax here.

Is this what you are asking?

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Customer reply replied 1 year ago
thanx.
Customer reply replied 1 year ago
or if grandparents dont give can v do a IRS 709 as parents giving him additional 21k? what will b tax implication for the 21k & doing 709 ?

As parents, your total gifts of approximately $49k are called taxable gifts because they exceed the $28k combined annual exclusion. But you won’t actually owe any gift tax unless you’ve exhausted your lifetime exemption amount of just over 5 million dollars.

Assuming you haven’t, the two taxable gifts simply reduce your lifetime exemption by $21k [($49k - 28k = $21k].

So still no tax consequence.

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Customer reply replied 1 year ago
but since the 21k exceeds the 28k for 2 parents within one year, doesn't dad have to do a 709 for the 21k even if he doesn't pay any gift tax . thanks

Yes, you must file a gift tax return (whether or not any tax is ultimately due) if you gave gifts to someone totaling more than $14,000 (other than to your spouse). Thus, you must file Form 709. There are exceptions for this but they do not appear to apply in your case.

Maverick
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Customer reply replied 1 year ago
thanks so much
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