Siblings and Gift Taxes

[Trustbaby]

What is the name of your state? Michigan

I'm aware of the federal tax rule that says a parent can gift up to $10,000 to a child tax-free. Any funds beyond that amount is taxable income for the child.

Does this tax rule also apply to siblings? Can an elder brother, for example, gift assets to younger brothers and sisters, tax-free, up to a limit?

Thanks.

 

[FlyingRon]

I'm aware of the federal tax rule that says a parent can gift up to $10,000 to a child tax-free. Any funds beyond that amount is taxable income for the child.

You're incorrect. It's $12,000 and it's not that it becomes income to the giftee, it's the fact that it makes YOU subject to gift tax.

See IRS PUB 950 http://www.irs.gov/publications/p950/

It doesn't matter what the relationship of the person is. It doesn't need to be a relative. You can give it to a number of relatives until you hit a million or so in total gifts.

 

[Trustbaby]

Thanks again, Ron! I thought I had it backwards. I'll look for that IRS publication.