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Level 2
posted Mar 16, 2024 5:45:41 AM

Giving partial of proceeds from life insurance check to a sibling over $25K

I live in Maryland and just received a life insurance check due to my dad's passing and will be depositing the check in my bank account soon.

I would like to split the proceeds with my sibling. Would there be tax implications of issuing a cashier's check to my sibling of $25K+, even if it's from life insurance proceeds? If I do have to report this as a gift, is this form to report it available in the Turbo Tax Deluxe software when filing taxes? I usually e-file Federal and Maryland with the TurboTax Deluxe software, so I want to make sure that I won't have to do anything separately if it does have to be reported next year. 

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2 Best answers
Level 15
Mar 16, 2024 5:52:08 AM

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

 

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.    In 2024 that yearly limit will increase to $18,000.

 

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

 

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

 

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

Expert Alumni
Mar 16, 2024 6:08:56 AM

The information provided by xmasbaby0 is correct.  I would advise having a tax professional complete Form 709 for you.  It's important to keep it in a safe place for many years to come as proof of your filing it. 

 

@cunninar 

3 Replies
Level 15
Mar 16, 2024 5:52:08 AM

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

 

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.    In 2024 that yearly limit will increase to $18,000.

 

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

 

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

 

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

Expert Alumni
Mar 16, 2024 6:08:56 AM

The information provided by xmasbaby0 is correct.  I would advise having a tax professional complete Form 709 for you.  It's important to keep it in a safe place for many years to come as proof of your filing it. 

 

@cunninar 

Level 2
Mar 19, 2024 1:46:21 AM

Thank you so much for your response.