Gifting cash proceeds to nieces and nephews of deceased and avoiding tax

[nckdunn292]

the amount gifted would be around $41,000 per niece or nephew, total 4, from a total cash estate of approx. $363,000. I received all as a beneficiary or co-owner, but dad asked that I give the appropriate portions to my brothers children.  Want to do correctly and avoid taxes.

[LindaBelmont · Accepted solution]

Gifts are not reported on the 1040 form (neither the giver of the gift or the recipient of the gift must report it.).

However, since the amount per person is over $14,000,  you, the giver of the gift must file a gift tax form. In almost all cases, this is just a paperwork exercise since the exclusion is over $5,000,000. (I can't remember the exact amount). So there should be no gift tax due, but you need to do the paperwork.  Here is a link to more details that you ever wanted to know about gift taxes, but it will tell you how to do it.

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-tax...

Now, if you have NOT actually sent the money, you might be able to avoid even having to file a gift tax form. It would only work if you and your nieces and nephews are all married.  You could give each niece and nephew $14,000; your spouse could give each niece and nephew $14,000; you could give the spouse of each of your nieces and nephews $13,000 (that should total $ 41,000).