Gift Tax

[dbarash]

Each member of my family was gifted $10,000 at the end of last year by a friend. Can my children, who are 12 and 14, gift their portion to my wife and I in order that we may their $20,000 portion to renovate our house, e.g. new playroom? Or is their $20,000 tied up in their accounts for use only on them, e.g. tuition, clothes, etc.

Thanks for the help.

 

[loku]

Children's property

As far as the gift tax provisions are concerned, if the donors (your children) are competent to make the gift, and they do make the gift according to state law, then there is a gift and the $10,000 exclusion applies to each gift.

However, whether the children are competent to make a gift, and whether it would be allowed for you to use the money for household renovation depends on state law, not tax law. You might be more likely to find someone to answer that if you post your question under the topic of Family Law.