Annual Gift Exclusion

[bce0]

My wife and I plan on gifting $36,000 each to our single parent and her two minor children, $108,000 in total. Since the minor children do not have a checking account can I just make the payment to the single parent and in the notes of the check indicate the minor children names and amount?  Or would the IRS view that as comingled funds into the parent's checking account and nix the theory that we gave $36,000 to each individual?

Thanks for your thoughts.

[Mike9241]

No. the money must go to the children's account. They can be established for the children and the parents named as trustees/custodians under that states gift to minors act.   Depending on what these accounts earn and the ages of the kids, the kiddie tax may come into play. Not knowing how the money will be invested makes it impossible to determine beforehand whether or not the tax will apply. see this tax topic

https://www.irs.gov/taxtopics/tc553 

[xmasbaby0]

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.    In 2024 that yearly limit will increase to $18,000.

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N