Gift Tax Law to Parents

[itgonerain]

What is the name of your state (only U.S. law)? New York

Hi,

I am an adult and would like to transfer over $20K to my parents bank account. After reading the gift tax laws, I am still confused about how it works.

So if I transfer $30K, what are next steps?
Parents receive the full $30K in their bank account. First $13K is not taxed.
- So at the end of 2010, parents need to fill out tax form and pay taxes on $17K?
- Also, would I deduct the $30K from my gross income in 2010 and get a tax benefit?

I guess the bigger question is post transfer & at the end of the year, between my parents increased taxes and my decreased taxes, is there a net loss or would we combined break even.

Thanks!
Tony

 

[Antigone*]

What is the name of your state (only U.S. law)? New York

Hi,

I am an adult and would like to transfer over $20K to my parents bank account. After reading the gift tax laws, I am still confused about how it works.

So if I transfer $30K, what are next steps?
Parents receive the full $30K in their bank account. First $13K is not taxed.
- So at the end of 2010, parents need to fill out tax form and pay taxes on $17K?
- Also, would I deduct the $30K from my gross income in 2010 and get a tax benefit?

I guess the bigger question is post transfer & at the end of the year, between my parents increased taxes and my decreased taxes, is there a net loss or would we combined break even.

Thanks!
Tony

Frequently Asked Questions on Gift Taxes

Very good information above.

You can make a gift to each parent of 13,000 in 2009 and the exclusion would apply.

YOU (the donor) would pay the tax (if applicable) and file the return, not the donee.

 

[LdiJ]

Frequently Asked Questions on Gift Taxes

Very good information above.

You can make a gift to each parent of 13,000 in 2009 and the exclusion would apply.

YOU (the donor) would pay the tax (if applicable) and file the return, not the donee.

In addition, if you have not exceeded your lifetime exclusion for taxing (currently 1 million dollars) there would be no gift tax.

 

[anteater]

You can make a gift to each parent of 13,000 in 2009 and the exclusion would apply.

That will be a mean feat.

 

[Antigone*]

That will be a mean feat.

hey...he could do the Back to the Future thing