Gift taxes law

[Tony999]

State of California

My parents are giving me $40,000 for a down payment on a home.

I understand that $20,000 falls under normal, tax free gift law, correct?

Do I understand this correctly:

The excess $20,000 has to be REPORTED, but it may NOT be taxed because it can fall under the "unified" tax law - that is, it will be included upon their death against their total estate tax exempt amount ($1million?)??
Or, any money they give me above the $20,000 (during one year)doesn't get taxed until it reaches that unified/estate limit and upon their death?

Please clarify. Thanks in advance for any information.

 

[dmode101]

Very close. The annual exclusion is now $11,000 for 2002. If your parents elect to do a "split gift" between themselves, then they can get 2 exclusions = $22,000. So the net taxable gift would be $18,000, but until the taxable gifts, lifetime or at death, reach $1,000,000 no tax would be due.