The Tax Implications of a $10,000 Monetary Gift
Generally, the federal tax code taxes the donor of the gift, and not the recipient of a gift. Tax lawyers and accountants can spend their entire careers on learning the intricacies of the federal gift tax rules for generation-skipping gifts, unified gift tax rules, exclusionary gift rules and learning the nuances and differences between gift taxes from estate taxes. The following discussion provides a very simple explanation of the tax implications for a $10,000 gift.
Gift Tax Basics
Under the federal tax code, taxpayers who make monetary gifts are usually responsible for paying the federal gift taxes. The IRS allows taxpayers who transfer cash or property as gifts to exclude limited gifts to provide them with an exception to the general rule that gifts are taxable to avoid gift tax liabilities. To determine whether the transfer is actually a gift and not a loan, the IRS uses special gift tax rules and requires gift donors have an intent to transfer property unconditionally and without expecting a gift in return or repayment.
Excludable Gifts
Whether a $10,000 monetary gift is taxable depends on the specifics of the gift transfer and the donee. Taxpayers do not have to pay gift taxes on property or cash transferred for tuition or medical expenses, for gifts to political organizations and gifts to the taxpayer's spouse, regardless of the amount of the gift. Taxpayers who provide gifts to other individuals or for other purposes, can determine their individual tax liabilities using the IRS rules for exclusionary gifts under the current (as of Feb. 2011) tax year.
Exclusionary Limits
As of January 1, 2009, the IRS raised its previous gift exclusion allowances and now allows taxpayers to exclude up to $13,000 in gifts to each donee. The exclusionary limit applies to individual transfers. For instance, Bob cannot give Susan a gift of $5,000 and $10,000 and exclude both of the gifts because of each gift did not exceed the $13,000 limit. However, Bob may give Susan $13,000 and avoid paying taxes on the gift. Additionally, Bob may give Susan, Joe and Jane each $13,000 and avoid gift taxes on all three gifts. Taxpayers can take advantage of larger tax exclusions for transfers of jointly owned property. Effective as of January 1, 2009, each married taxpayer can combine their exclusionary allowance and transfer property together, for a total exclusion of up to $26,000. Using the same example, Bob and his wife, Kathy, may both give each of their children up to $26,000 and avoid tax liabilities for each gift.
Forms
Since cash donations do not require taxpayers to determine fair market value as they would for nonmonetary property, determining the amount of the exclusion is relatively simple. If Bob were responsible for paying gift taxes because he exceeded the $13,000 or $26,000 combined threshold, then Bob would use IRS Form 706, U.S. Gift Tax Return and Instructions to Form 706 to report and pay his tax liabilities by the federal tax deadline.
Considerations
Since tax laws can frequently change, you should not use this information as a substitute for legal or tax advice. Seek advice through a certified accountant or tax attorney licensed to practice law in your jurisdiction.
Tax implications of a family loan - Bankrate
www.bankrate.com/brm/itax/tax_adviser/20070816_family_loan_a1.aspDear Tax Talk: I am taking out a business loan with my dad. What should the interest rate be on the loan to avoid it being considered a gift?--Brenda
Tax implications of Quit claim deed - Mortgage Community
www.mortgagefit.com/discuss/quitclaim-taximplications.htmlWhat are the tax implications of a Quit Claim? Who pays the property tax? Thank you.
Can I gift money to my wife? what are the tax implications? shall ...
in.answers.yahoo.com/question/index?qid=20081116145717AAV7Y0hLast updated: Nov 17, 2008 6 posts First post: Nov 16, 2008Nov 16, 2008 Can I gift money to my wife? what are the tax implications? shall I declare in my IT ret? 5 years ago; Report Abuse
What are the Tax Implications of Gift Income? (with picture)
www.wisegeek.com/what-are-the-tax-implications-of-gift-income.htmMay 05, 2013 In the US, gift income is subject to a gift tax and is governed by Chapter 12, Subtitle B of the Internal Revenue Code. Gift tax...
Check the tax implications of gifts Money Banking and Money ...
www.couriermail.com.au/money/check-the-tax-implications-of-gifts/...PARENTS or grandparents need to consider the tax implications of gifts, financial or other, to their children, a financial adviser says. HLB Mann Judd wealth ...
Tax Implications of Gifting Money eHow - eHow How to Videos ...
www.ehow.com Tax Information Federal TaxesNov 13, 2012 Tax Implications of Gifting Money. Gifting money or property is an area of tax law fraught with myths. Some people believe they can avoid paying taxes on ...
Estate Tax / Inheritance Tax & Gift Taxes
www.themoneyalert.com/Estate-Tax.htmlA compilation of estate and inheritance tax tables, including the 2013 upcoming scheduled estate tax changes.
Gift Tax: What's in a Gift? - Moneycontrol.com
www.moneycontrol.com NewsThe last thing that you want to think of while receiving a gift is about the tax implications of it. The Gift Tax has had a bit of a roller-coaster ride in India ...
The Tax Implications of a $10,000 Monetary Gift eHow
www.ehow.com Personal Finance Tax Information Tax PlanningGenerally, the federal tax code taxes the donor of the gift, and not the recipient of a gift. Tax lawyers and accountants can spend their entire careers on learning ...
Estate And Gift Tax (Encyclopedia of Everyday Law) Study Guide ...
www.enotes.com Law and Politics Estate PlanningEstate And Gift Tax Reference (Encyclopedia of Everyday Law)
0 komentar
Posting Komentar