Estate Planning - Cash Gift (Tax)

[nalnk]

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

Husband's father (82) lives in South Carolina and would like to give his son (my husband) large cash amount (gift). is there any tax liability on the gift? Federal or State?

 

[LdiJ]

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

Husband's father (82) lives in South Carolina and would like to give his son (my husband) large cash amount (gift). is there any tax liability on the gift? Federal or State?

A person may give another person up to 14,000 in one year without any gift issues arising. Anything above that requires the giver to file a gift tax return. There is no actual tax due unless the person has exceeded their lifetime exclusion for gifting. That is currently in the millions. Depending on what the money is for, dad could also gift you and any other member of the family 14,000 too.

 

[FlyingRon]

And if Dad is still married, the wife can also make a similar gift on her behalf.

What Ldij is telling you are the FEDERAL rules. New Jersey doesn't have a gift tax. He's free to give away things without worry about state taxation issues. New Jersey's estate tax exclusion is much lower than the feds, it's only currently $675,000.

Hopefully this is money that Dad does NOT need. If he is needing medicaid services, such gifts could disqualify him from eligibility.

 

[curb1]

The father can give up to $5 million during his lifetime without any federal taxes. There might be the need to fill out a federal tax form for the gift but that is a "no brainer" for most people, or an easy form for a CPA.

So you shouldn't have any problem. It should be inexpensive to have a tax accountant oversee the transaction.

 

[FlyingRon]

Whoops, I missed the fact the donor was in SC. SC does not have an estate or gift tax.