How much in gifts can I receive per year in the US?
After reading IRS Pub 950 it appears one couple can gift another couple up to ,000 per year. My question, how much can one receive per year?
For example, take my girlfriend and me: Can we receive k from my parents and also k from her's without trigging a taxable event? Or perhaps a better question is, does this burden always fall on the donor, and never the donee?
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In the US, gift tax always falls on the donor, never the recipient, and gifts
are not taxable income to the recipient. The IRS could raise questions if there
is an employer-employee relationship between donor and recipient; your employer
cannot give you money or property (e.g. a Rolex watch) or benefits (e.g. a house
to live in rent-free) and claim that it is a gift, so that you do not have
to pay income tax on that money. But, your parents need to be careful; that
K per person is the exemption for the whole year and once they give you
that, anything extra (birthday present, Christmas present etc) is subject
to gift tax (for them) though you can still enjoy your gifts without any
tax issue.
Under current US tax code, you can receive K from an unlimited number of people with no tax consequence to them.
Yes, the burden is on the giver.
There's an exception to most rules. If I gift you a large sum and don't fill out the required paperwork, paying the tax due, the IRS can go after the recipient for their cut. "Follow the money" is still going to be applied.
Even if over K, a tax isn't always due. Form 709 is required, and will allow a credit against one's lifetime gifting, currently .34M. In effect, the current limits mean that 99%+ of us will never worry about this limit, just file the paperwork.
Last, the 529 College Savings accounts permit a 5 year look ahead, i.e. a parent can deposit K to jump start her child's account. Then no gift for next 4 years.
If you need to transfer a larger amount than the K/person/person limit, one accepted workaround is to structure it as a loan, then gift the payments over the duration of the loan. There are "intra-family mortgage" companies which specialize in setting up this kind of transaction. Note that this doesn't allow you to give more without penalty, it just lets you transfer the actual cash earlier, in exchange for some bookkeeping overhead and some fees for the legal processing and mortgage registration.
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