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The individual gift exemption for 2016 is $14,000. So any amount above this would be a taxable gift. This amount would go against your lifetime exclusion of $5.4 million. So if you gifted $140,000 your lifetime exclusion would be reduced by $126,000. You would need to filed a gift tax form to report the gift (Form 706).
Ok you would responsible for the taxes for the time that you owned the business. So you would be responsible for sales tax and payroll taxes (if you had any employees). Neither of these taxes should impact the previous owner. So as long as you paid the sales taxes and payroll taxes for the time that you owned the business you should be fine.
It is considered a taxable gift but it goes against your lifetime exemption. As a result of being a taxable gift form 706 would be required. There would be no taxes due. The gift would just reduce the 5.4 million lifetime exemption.
Yes, you are correct. A few years ago the government combined the gift and estate tax exemption together. This is what makes up the $5.4 million. Yes, the $126,000 would reduce the $5.4 million and there would be no taxes that are due.
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