who pays tax on gift

[bilbo67]

What is the name of your state? massachusetts
over the course of a year i've recieved cash gifts from my mother over $11000 dollars. $18000 to be exact. how is the extra $7000 treated tax wise. do i treat it as income?

[anteater]

Originally Posted by bilbo67

What is the name of your state? massachusetts
over the course of a year i've recieved cash gifts from my mother over $11000 dollars. $18000 to be exact. how is the extra $7000 treated tax wise. do i treat it as income?

No, you are in the clear. But, mother should file a gift tax return for the $7K. While she is obligated to file that return, it is unlikely that any actual gift tax will be owed due to the $1M lifetime credit.

[dallas702]

But don't sell anything you bought with that gifted cash because they might want you to claim it as income or profit.

[abezon]

Originally Posted by dallas702

But don't sell anything you bought with that gifted cash because they might want you to claim it as income or profit.

What are you smoking? Only income is taxed, and the income from a sale of an asset is the difference between what you paid for it & what it cost you. If you use gifted funds to buy stocks & later sell them for a profit, only the profit is taxable income. The fact that the original purchase was with gifted cash is irrelevant.

[anteater]

But don't sell anything you bought with that gifted cash because they might want you to claim it as income or profit.

Originally Posted by abezon

What are you smoking? Only income is taxed, and the income from a sale of an asset is the difference between what you paid for it & what it cost you. If you use gifted funds to buy stocks & later sell them for a profit, only the profit is taxable income. The fact that the original purchase was with gifted cash is irrelevant.

You have to understand the context. We're all just sheep and the IRS is our sheep dog.

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[dallas702]

Yeah....we were just having a little dogfight.