Will I owe money to the IRS if I gift more than 14000 this year?

Forum|Forum|7 years ago
May 31, 2019
2 replies
8 views

I want to gift up to 40,000 this year to one person. Will I owe money because it's above 14000, which is the annual limit? I know there's a lifetime exclusion limit of roughly 5 million. If I don't cross that limit, will I still owe, will I not owe anything as long as that isn't crossed? I don't want to gift more than the 14k if I will have to pay taxes on it.

TurboTax Deluxe Online

Best answer by DoninGA

The gift limit for 2014 is $14,000 to each individual without having to file a gift tax return, Form 709. If you have not exceeded the limit of $5.34 million in total gifts given there will be no gift taxes owed.

DoninGA

Answer

Level 15

rafiwardak2003Author

Level 2

So that 5.34 million limit isn't just to many recipients... say I send 40k this year to one person, to confirm this, I will owe no taxes on it. I have not have exceeded the 5.34 limit.

ScruffyCurmudgeon

Alumni - Champ

Gift Tax has nothing to do with Income Tax.

The Gift Tax is integrated with Federal Estate Tax.

If you personally own under $5.43 million in total assets, you are this year, and presumably in the future, not liable for Estate Tax. However, the system is set up such that large Gifts made reduce that $5 million figure.

So, each year you, and if married your spouse also, are allowed to give any one individual $14,000 from each of you, thus a married couple can give, for example to a child, $28,000. If the child is married, that doubles up by giving to the child's spouse, for a total of $56,000 [in 2015].

If an individual gives more than the $14,000 to a single individual, the donor is obligated to file a Form 709 Gift Return so that the IRS can keep track with the Estate Tax in mind. Ultimately, even if you give away $1 million in a year to one person, if you yourself have under the $5.43 million, then at your death there would be no Estate Tax liability, assuming that you did not have further increase in your assets. However, nevertheless you would still be obligated in the year of alarge [>$14,000] gift to file Form 709

http://www.irs.gov/pub/irs-pdf/i709.pdf Instructions
http://www.irs.gov/pub/irs-pdf/f709.pdf Form

If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67. NOT INTUIT EMPLOYEE . USAR 64-67 AIS/ASA MOS 9301 - O3 . - Just donating my time. **Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.

ctx192021

Level 4

Is there software available for help filling out Form 709?

It appears it is not supported in Turbo Tax.

Thanks

ToddL99

Level 13

From @85525 :

Unfortunately, you won't be able to file a Gift Tax Return with TurboTax. A Gift Tax return should be filed separately from your personal income tax return as it has no effect on taxation at the individual level.

The IRS provides Form 709 and Instructions here:

Form: Form 709

Instructions: Form 709 Instructions

@ctx192021