My father-in-law (91) lives in Fl and wants to sell his home and give us (in NY) 200,000 towards a new home and live with us. Do we have to pay tax on that money?

[dbm5510]

My father-in-law (91) lives in Fl and wants to sell his home and give us (in NY) 200,000 towards a new home and live with us. Do we have to pay tax on that money?

[ThomasM · Accepted solution]

No, it's the giver who is subject to any gift tax, not the person who receives the gift.  But a giver is allowed a lifetime exemption of (currently) $5.45 million without being subject to the tax.

If the gift is greater than $14,000 in a year, then he will have to file an IRS Form 709, US Gift Tax Return, for the year in which he makes the gift.  The form doesn't trigger a tax; it simply documents the amount given in a particular year, for (eventual) calculation of the lifetime total.

So you won't pay tax on the gift, but remind your father-in-law that he will need to file the Form 709 for the year he actually makes the gift to you.

Here's some further reading on the gift tax:  https://www.irs.gov/pub/irs-prior/p950--2006.pdf.

[dbm5510]

Thank you very much for your quick response.  Will we have to pay Income Tax on it?

[ThomasM]

No.  Your father-in-law must file the Form 709, however.

[dbm5510]

Awesome!!  Thank you !