Receiving a Gift

[veeleexb]

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


My Grandfather has recently come into a large sum of money and wants to give some of his children and grandchildren an amount of money that is over the $12,000 that can be given tax free. If he gives me $12,000 and my fiancee $12,000, can my fiancee then give me the same $12,000 that was given to him by my grandfather? My Grandmother is deceased so he cannot split the gift with his spouse. If my fiancee is allowed to "re"-gift me the same money is there more involved other than him signing the check over to me?

I'm really in the dark and would appreciate any advice.

 

[LdiJ]

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


My Grandfather has recently come into a large sum of money and wants to give some of his children and grandchildren an amount of money that is over the $12,000 that can be given tax free. If he gives me $12,000 and my fiancee $12,000, can my fiancee then give me the same $12,000 that was given to him by my grandfather? My Grandmother is deceased so he cannot split the gift with his spouse. If my fiancee is allowed to "re"-gift me the same money is there more involved other than him signing the check over to me?

I'm really in the dark and would appreciate any advice.

What your grandfather should really do is give everyone half of it now, and then give everyone the other half in January of 2010. Its also 13,000 now, not 12,000.

 

[veeleexb]

What your grandfather should really do is give everyone half of it now, and then give everyone the other half in January of 2010. Its also 13,000 now, not 12,000.

If he does it that way each of us will be waiting over 4 years, and my grandfather would rather give half now and half in January, but I am the only one without a spouse. If my fiancee signs his check over to me, would that be considered a gift from him or my grandfather?

 

[anteater]

If the transaction came under scrutiny, it would be considered a gift from grandfather to you since the "gift" to your fiancee was an obvious sham.

Does grandfather have a large enough estate that estate tax is a potential concern?

No gift tax has to be paid on the first $1M of reportable gifts (the amounts greater than $13K annually to any one person) although the reportable gifts do reduce the estate tax exclusion available when he does pass away.

Many people get freaked out when they are told that they need to reports gifts greater than $13K when, in reality, it should be a non-issue because they don't have nearly enough assets to cause a gift/estate tax liability.