Gift tax?

[erinspice]

What is the name of your state? Alabama

Are the gift tax limits per money transfer? Is it legal to split up gifts to avoid the gift tax?

 

[efflandt]

It is per person, per year, not per gift. Any individual can give any other individual up to $12,000/yr without reporting requirements. A couple (like your parents) could give you up to $24,000. A couple could give another couple $48,000.

Search for "gift tax" on irs.gov.

Also search the internet for "suspicious activity report".

 

[erinspice]

Thanks, I've read about it. It's still not clear to me, however, if it is legal to split money up and pass it around in order to avoid the gift tax? If a single person is given 6 $12,000 gifts by 6 different people, does that person have to pay taxes on any of them?

 

[LdiJ]

Thanks, I've read about it. It's still not clear to me, however, if it is legal to split money up and pass it around in order to avoid the gift tax? If a single person is given 6 $12,000 gifts by 6 different people, does that person have to pay taxes on any of them?

The person receiving the gift NEVER has to pay taxes on it, no matter how big the gift is. The person giving the gift is the one responsible for paying gift taxes if gift taxes apply.

Therefore no, if 6 different people give you 12k, you are not subject to gift tax and neither are they.

 

[anteater]

......
Therefore no, if 6 different people give you 12k, you are not subject to gift tax and neither are they.

Except, of course, if those 6 different people received the $12K each from the Wizard of Oz with the understanding that they would subsequently gift each $12K to the OP.