Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.
Good afternoon. Neither of you will likely owe any tax on this transfer. There is no income
involved since it's a gift...thus it need not be reported on either income tax return
. There should be no gift tax
consequences. Recipients of gifts are not subject to gift tax. And, there should also be no gift tax due from the donor. Each donor can give $14,000 per year per person under the annual gift exclusion. In addition to that, for any amounts in excess of the $14,000 in a year, each person has a $5,250,000 lifetime exemption....which means a person can give a cumulative amount of up to $5,250,000 in gifts over and above the $14,000 annual gift exclusion amount without incurring gift tax....the donor must file a gift tax return
to let the IRS
know how much of the lifetime exemption is being used, but there will be no gift tax until cumulative additional gifts have exceeded the $5,250,000.
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