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I am 70 years old and live in Lawton, OK. I have an ...

I am 70 years old...
I am 70 years old and live in Lawton, OK. I have an adopted son who is 54. He wants to buy a condiminum but needs $30,000.00 to complete the loan requirement. I wish to give him the $30,000.00 that he needs but I am only allowed to give him according to the IRS up to $12,000.00 per year as a gift. He needs the whole $30,000.00 now to close the deal. How can I give him the money he needs now leagally via IRS rules? I would like for it to be a gift rather than a loan. How can this be done and comply with the IRS requirements?
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Answered in 26 minutes by:
6/1/2008
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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Hello bill_pitts,

Actually the IRS rule that you are referring to does not limit the amount of the gift that you can give to an individual in any one year, it just states that any amount over $12,000 each year given to any one individual must be reported to the IRS on Form 709.

The IRS has what is called the Uniform Tax Credit, which allows every individual a lifetime exemption on gifts or estates. Currently for the year 2008 that lifetime exemption amount is set at $2 million. If you give an individual a a gift of $12,000 or more in any one calendar year, the gift must be reported on Form 709 and it counts towards your lifetime exemption amount of $2 million, but no taxes are due unless you eventually exceed the $2 million exclusion amount. This is simply a reporting requirement to account for the gift.

If this answer has been helpful, please press the "Accept" button. Positive feedback is also greatly appreciated. Thanks for the question.

Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
Verified
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