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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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what is the non- taxable limit for a gift to an individual

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Can one individual gift up to the limit to more than one other individual.
Is there a limit to the amount of gift an individual can receive without being taxed on the gift.

DearCustomer-

A gifter/donor can make gifts to as many individuals as they want. The total gifts in a calendar year to any one individual cannot exceed $12,000. All gifts during the year are combined, birthday, anniversary, Christmas, graduation, etc. If one individual recieves more than $12,000, the gifter will be required to file a gift tax return Form 709. However, there will be no gift tax to pay until the combined excess gifts exceed $1,000,000.

For example, your uncle has 14 nieces and nephews, and each of them are married. He can make 28 gifts of $12,000 each or $336,000 and not have to file a return. If he were to give each of them $20,000 or $560,000 he would need to file a gift tax return, Taxable gifts would be $224,000, but he would not owe tax because the total is below th $1,000,000. Going forward, he would still be able to make taxable gifts of $776,000 before owing gift tax. Each year he can gift the $12,000.

The individual receiving the gift is never taxed.

I have provided a link to the IRS web page, confirming my explanation

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html

Hope this helps.

Steve

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