Tax on cash gifts

[hdulc]

Beginning in 2022, I will start giving my 93-year-old mother-in-law a fair amount of cash each month to help pay for 24-hour caregivers. Will there be tax consequences for either of us?

[DoninGA · Accepted solution]

Gifts received are not reported on a tax return and are not taxable, regardless of the amount of gift received.

Gifts given are not reported on a tax return.  However, if the total of all gifts given to an individual are greater than $15,000 in a tax year the gift given has to be reported to the IRS on IRS Form 709.  There will not be any taxes owed on the gifts given if the total of all gifts ever given is less than $11.58 million.

TurboTax does not support IRS Form 709

IRS Form 709 - https://www.irs.gov/forms-pubs/about-form-709

[Hal_Al]

Payments for a family member's education or health care expenses are exempt from the gift tax. 

Reference: https://www.elderlawanswers.com/you-can-avoid-the-gift-tax-by-paying-for-education-or-health-care-18....

Furthermore, since you are probably now paying more than half her support, you may even be able to deduct some or all of those payments. 

If your close relative cannot be your dependent because she had more than $4,300 of gross income, but otherwise would have qualified as your dependent (basically that you & other family members provided more than half her support), then you can include in your deductible medical expenses any qualifying medical expenses you paid on her behalf just as if she was your dependent.