Giving my inheritance to my son, is gift tax due?

[Jennny]

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

I expect to inherit about $400,000 from my father's estate. He was a Canadian and resided in Canada. I would like to give half of this money to my son, who lives in NC. Will I have to pay a gift tax?

Would it be better, if possible, to have the executor of the estate, my brother, who lives in Canada, send the payment directly to my son?

Thanks for any help with this.

Jenny

 

[anteater]

You would have to file a gift tax return. But keep in mind that the lifetime gift exclusion is now at $5.34 million. So, you would not have to pay any tax. It would only result in relatively small decrease in the unified gift/estate tax exclusion. Do you think that there is a chance that your estate will be up in the $5+ million range?

I don't know Canadian law, but I would assume that the executor can't just decide to distribute assets to non-beneficiaries. But, if this is your only son, you might ask the executor if it is possible under Canadian law for you to make a partial disclaimer.

 

[FlyingRon]

How old are you?

 

[Jennny]

How old are you?

I'm 75 years old, with substantial assets, but not likely to leave an estate of over 5 million.

 

[tranquility]

I'm 75 years old, with substantial assets, but not likely to leave an estate of over 5 million.

If you were to have died before the inheritance, would your son have gotten the money? If so, you might try some disclaimer strategy. That way there is not a "gift" from you. You can't disclaim to son, but you can disclaim and if son would otherwise inherit, he could get it.

 

[FlyingRon]

The question is whether you may need to avail yourself of medicaid for nursing care, but it sounds like no.

 

[Jennny]

If you were to have died before the inheritance, would your son have gotten the money? If so, you might try some disclaimer strategy. That way there is not a "gift" from you. You can't disclaim to son, but you can disclaim and if son would otherwise inherit, he could get it.

Yes, the way the will was written my son would inherit my share if I had predeceased my father.

It seems like I won't have to use the disclaimer strategy, since I won't have to pay gift tax....I can just give the money to him directly.

 

[curb1]

Filing the gift tax return (Form 709) is a "no-brainer". Any tax accountant can help you with it, or you could probably do it yourself if you are sharp. There will be no taxes. Line 7 of the return is significant where you enter the lifetime exclusion.

 

[Jennny]

Filing the gift tax return (Form 709) is a "no-brainer". Any tax accountant can help you with it, or you could probably do it yourself if you are sharp. There will be no taxes. Line 7 of the return is significant where you enter the lifetime exclusion.

Thanks very much to all of you who have responded to my query. I can relax now and send my son the share of my inheritance that I'd like him to have. I will get a Form 709 and complete it.

Again, thanks everybody for your help.

Jenny

 

[tranquility]

Thanks very much to all of you who have responded to my query. I can relax now and send my son the share of my inheritance that I'd like him to have. I will get a Form 709 and complete it.

Again, thanks everybody for your help.

Jenny

If you are giving that kind of money, pay your tax guy to do it. It should not cost that much and you could make more money spending the time calling about your cable bill than figuring out the forms.