Gift Tax Question

Forum|Forum|4 years ago
March 3, 2022
2 replies
11 views

If I give a $100,000 gift to someone in 2022 but a week later in the same year (2022), the same person gives me that $100,000 back as a gift, do we both have to file a gift tax return or do these cancel out like nothing happened?

Anonymous_

Level 15

Rationally, they should cancel each other out but, technically, they are each completed gifts (unless there was an understanding that the first transfer was not intended to be irrevocable or otherwise a true gift).

MinhT1

Level 15

If you consider the transactions as gifts, then each person will have to file a gift tax return for tax year 2022 as the amount of the gift exceeds the gift tax exclusion of $16,000 for tax year 2022. The wo gifts do not cancel each other out.

However, if you consider that Individual A made a private loan of $100,000 to Individual B, then a week later Individual B repays the loan to Individual A, then there is nothing to report (if there is no interest paid/received).

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