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Yearly or lifetime IRS limit on giving (gifting?) money to other persons? denisepearson01 10-04-2007
Posted by Rich Carreiro on October 5, 2007, 12:22 am
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 denisepearson01@gmail.com writes:

> I'm a U.S. citizen. Is there a IRS rule limiting how much I
> can give (or gift?) to other U.S. citizens?

No.

But if you give enough, the amount shielded from
estate tax when you die is reduced, and if you really
give enough, *you* have to pay gift tax on what you give.

> If my giving or gifting does trigger an IRS tax, is the tax
> on:
>
> 1.) The total I've given (or gifted) to a particular
> individual this year?

Yes, sort of.

> 2.) The total I've given (or gifted) to a particular
> individual since I began giving a few years ago?

No.

> 3.) The total I've given (or gifted) to anyone/everyone this
> year?

No.

> 4.) The total I've given (or gifted) to anyone/everyone
> since I began giving a few years ago?

Yes.

> Or is the tax on any "new" amounts given after a particular
> threshold is met (e.g., $10,000) ?

Yes.

> If it is, is that threshold per person/per lifetime, or for

No.

> everyone per lifetime,

No.

> or per person/per year, or for

Yes.

Whether or not a gift is taxable depeneds on whether or not
you go over the annual per-recipient threshold in a
particular year, but how much your estate tax exemption is
reduced (or how much gift tax you pay if you've zeroed your
estate tax exemption) depeneds on *your* lifetime total of
taxable gifts.

See Forms 706 and 709 and their instructions.

--
Rich Carreiro rlc-news@rlcarr.com

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Posted by John H. Fisher on October 5, 2007, 12:22 am
Please log in for more thread options
 denisepearso...@gmail.com wrote:

> I'm a U.S. citizen. Is there a IRS rule limiting how much I
> can give (or gift?) to other U.S. citizens? Does it depend
> on:
>
> 1.) The total I've given (or gifted) to a particular
> individual this year?
> 2.) The total I've given (or gifted) to a particular
> individual since I began giving a few years ago?
> 3.) The total I've given (or gifted) to anyone/everyone this
> year?
> 4.) The total I've given (or gifted) to anyone/everyone
> since I began giving a few years ago?
>
> If my giving or gifting does trigger an IRS tax, is the tax
> on:
>
> 1.) The total I've given (or gifted) to a particular
> individual this year?
> 2.) The total I've given (or gifted) to a particular
> individual since I began giving a few years ago?
> 3.) The total I've given (or gifted) to anyone/everyone this
> year?
> 4.) The total I've given (or gifted) to anyone/everyone
> since I began giving a few years ago?
>
> Or is the tax on any "new" amounts given after a particular
> threshold is met (e.g., $10,000) ?
>
> If it is, is that threshold per person/per lifetime, or for
> everyone per lifetime, or per person/per year, or for
> everyone per year?
>
> Or does the "lifetime" part have to do with my lifetime, as
> opposed to the lifetime of my recipient(s)?
>
> Thanks, in advance, for the clarification.

If you like you can give hundreds of people gifts of up to
$12,000 (current limit, could change), each, without having
to file a gift tax return. Your lifetime giving has to do
with gifts you've given which exceed the allowable amount,
each year, to any or all of the individuals, individually..
If the limit exceeds gifts to any one individual, or any #
of people (individually) only amount of that gift which
exceeds the $12,000 (or allowable limit for a particular
year) would be subject to the gift tax rules. Here are some
qualifiers which you may find useful:

http://www.irs.gov/newsroom/article/0,,id=107815,00.html

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Tom Russ on October 5, 2007, 12:22 am
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denisepearso...@gmail.com wrote:

> I'm a U.S. citizen. Is there a IRS rule limiting how much I
> can give (or gift?) to other U.S. citizens?

Short answer: No. There is no limit. There may, however,
be tax consequences.

Rather than answer your detailed questions, I will just
explain the rules and leave the application of them to those
questions as an exercise for the reader.*

There is a general rule and then there are some important
exceptions.

The general rule is that you can give as much as you wish to
anyone. The amount you give above an annual per person
threshold, however, can trigger the need to file a "gift tax
return." You also have a lifetime combined gift/estate tax
credit amount. If you give more than the annual threshold,
you file a return and begin using up the gift/estate tax
credit amount. Once that lifetime credit is exhausted, you
(or your estate) will have to pay tax on any gifts or (after
death) bequests. IIRC the credit currently appliles to $2
million, but I can't quite remember if there is a different
value for gift and estate purposes. This is currently in a
fair amount of flux, since there are annual changes (and
2010 is a particularly odd year).

The annual per-person threshold changes occasionally, but
IIRC the current value is $12,000 per person per year. As
long as the total of all annual gifts is less than this,
there is no need to file a return and no tax consequences.

There is also an unlimited exclusion for gifts between (U.S.
Citizen) spouses.

So, to summarize:
You can give to as many different people as you wish.
You can give $12,000 per year per person without tax
consequences.
Any excess giving begins using up your lifetime
gift/estate tax credit
Once the credit is used up, you start paying tax on gifts
and bequests.

* Can you tell I work for a university?

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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