gift tax

**nodmicks** · 11-14-2011, 05:04 PM

We were discussing this today and I think I grasp it but I want to make sure.

We all agreed that one can give $13,000 to one person in a year without the giver paying tax.

I also understood the giver could gift within these guidelines up to a few million without paying gift taxes.

Only two of us agreed that say "Sue could give me $1 million and I am not responsible for the taxes on the gift". "Sue must pay the gift tax on the $1 million". I am scott free of taxes on it.

I dont want to bug the tax lady about a hypothetical situation so I thought I'd ask here.

So are the two of us correct that the giver is responsible for taxes and not the recipient of the gift?

No, no one is really giving a big chunk of $. Just trying to settle a discussion

**tervsforme** · 11-15-2011, 07:35 AM

Yes, the giver is the one responsible for the tax. They would need to file a 709 Gift Tax return to report the gift and pay the tax.

**frugalfranny** · 11-15-2011, 12:27 PM

And then you can get more complicated with the 'lifetime giving allowance' for the giver........usually matches whatever the Feds have set.......but when you win the lottery be sure to check!!!

It gets a bit more complicated than that when you factor in the state rules.........and they can EACH be different......but the $13,000 stands..........for now.......even that has changed in last couple years.

**nodmicks** · 11-15-2011, 12:32 PM

Ah I never thought of state rules!

**frugalfranny** · 11-15-2011, 11:07 PM

Originally Posted by nodmicks

Ah I never thought of state rules!

And.........not for this..........but they can have some totally wild amts. (read low) when it comes to taxation......

For some interesting and educational reading go to your library and pick up some of the Nolo Law books..........Plan Your Estate....is one. The author of that one is Denis ...(yes, only one N).....something....he is an atty.
They are not your 'typical' dry legal reading stuff........good info in them and easy, fast, reading.

**nodmicks** · 11-16-2011, 09:50 AM

Thanks Franny. I will look and see if the library can bring these in through the loan program. LOL our discussion gets to get more confusing tomorrow!