topic If my parents want to give me $500k cash and I live in California, who would have to pay taxes on it? in State tax filing

If my parents want to give me $500k cash and I live in California, who would have to pay taxes on it?

rorysarah1 — Wed, 09 Sep 2020 01:51:15 GMT

Re: If my parents want to give me $500k cash and I live in California, who would have to pay taxes on it?

macuser_22 — Wed, 09 Sep 2020 01:59:14 GMT

No. Gifts no matter how much are not reportable or taxable to the receiver unless if is from a foreign country in excess of $100,000, then there is not tax but it must be reported.

The *giver* of a gift that is more than $15,000 in a year must file a form 709 gift tax return. There is no actual tax but it reduces the lifetime exemption of $11.58 million.

Re: If my parents want to give me $500k cash and I live in California, who would have to pay taxes on it?

rjs — Wed, 09 Sep 2020 02:05:15 GMT

If it's a true gift, you do not have to pay tax on it, or even report it on your tax return.

Your parents would have to file a gift tax return. They will not have to pay any gift tax unless the lifetime total of gifts they have given is more than $11,580,000, but they have to file the return. The gift will reduce their lifetime gift and estate tax exclusion.

Before making a gift of that size, you and your parents should consult both an estate lawyer and a tax professional who specializes in high-net-worth individuals.

If there are any restrictions or understandings about what you will do with the money, or if you are expected to do something in return, then it is not a true gift and other considerations might apply, and it could be taxable income to you. Again, you need to consult a lawyer and a tax professional.

Re: If my parents want to give me $500k cash and I live in California, who would have to pay taxes on it?

xmasbaby0 — Wed, 09 Sep 2020 13:25:49 GMT

One question--are your parents also in the U.S.? Or are they sending you this money from a foreign country?