I gave my daughter 50,000 to help her refinance her house to pay her ex his 1/2 of the equity.
I want to say that the 50,000 is split 16,000 from me to my daughter 16,000 from my wife to my daughter
16,000 to her son from me and 2,000 to her son from my wife. This should exclude this income from being taxable.
Is this a correct assumption? Will this fly so she won't owe any gift taxes on the 50.000?
Hi @gcar455
Thank you for asking this question about gift tax. When it comes to gift tax, there are two key elements that come into play. The first is the $16,000 Annual Gift Tax Exclusion (Tax Year 2022). If you give someone less that $16,000 then it is excluded from your taxes. You are correct that you can split a gift between spouses and between recipients.
If you go over $16,000 then the second factor comes into play. A person is allowed to give away $12.06 million in assets or property over the course of their lifetime (tax Year 2022). So, even if you go over the annual $16,000 in a year it may still be excluded as long as you haven't exceeded the lifetime gift limit. If you exceed the $16,000 limit, it will be reported on your taxes, but another calculation will be applied to determine if you lifetime limit was exceeded.
I hope that answers your question about gift tax and reporting. Please feel free to give TurboTax a call anytime if you have additional questions or need assistance.
Have a great day!