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Gift Tax

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dream2big

Junior Member
What is the name of your state? Calif.
I would like to give some money to my brother and daughter. I won the money and have to pay fed and state tax on it. I want to give each one $500,000. If I have to pay gift tax, the money would be taxes 2 times.
Thank You for any help :cool:
 


jkruler

Junior Member
dream2big said:
What is the name of your state? Calif.
I would like to give some money to my brother and daughter. I won the money and have to pay fed and state tax on it. I want to give each one $500,000. If I have to pay gift tax, the money would be taxes 2 times.
Thank You for any help :cool:
There is an $11,000 exemption amount that you can give to each sibling (each year). After that every dollar you give eats into your unified tax credit, however, you won't actually have to pay any taxes until you have exhausted your credit. You start off with a $1,000,000 credit, so if you have not used any of your unified tax credit, then you could could give each of them $500,000 in one year without paying any taxes. This will deplete 978,000 of your credit (1,000,000 - 11,000 -11,000).
If you can spread your gifts out over time, you will utilize less of your credit, since you will be able to utilize the 11,000 exemption each year.
 

dream2big

Junior Member
Thank You

Thank You for your help.

It looks to me if I gave more then $500k each I would have to pay taxes on the money I already paid taxes on. :eek:
 

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