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robertrr20122
Level 1

IRS 709 rules

I have a living parent (not a family member skipping a generation-GST) offering to give me an amount of cash above 10k, more towards 40-50k. Since this amount is above the 10k threshold, does the GST apply in this instance? ---(IRS 709 indicates it’s 24% on 40k-up to 60k = $12k), but is not skipping a generation since I am a biological son.

 

2nd – If so, on the 24%, instead can the parent make a direct principle payment to my home mortgage or even Dept of Ed - Student loan, thus skipping the direct payment to me so there’s no gift amount to be taxed ($12k) and make the payment direct from their bank acct to HMort or D of E? I understand I will not have the tax benefit on OUR (wife and I) tax return, but rather theirs, correct? And might lower their tax liability as well, correct?  

Thank you for offering this forum and your time. - Please OMIT my name if this question is reposted.

2 Replies
xmasbaby0
Level 15

IRS 709 rules

GIFTS

Money that you receive as a gift is not taxable income to you, and you do not need to report it on your income tax return.  Money that you gave as a gift to someone else is not deductible for your taxes.

 

Turbo Tax does not support the gift tax form 709, but here is a link:

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

 

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

 

https://www.forbes.com/sites/ashleaebeling/2017/10/19/irs-announces-2018-estate-and-gift-tax-limits-...

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
tagteam
Level 15

IRS 709 rules

You, as the child of the donor, are not a skip person. The GST does not apply.

 

See https://www.irs.gov/instructions/i709#en_US_2021_publink16784xd0e1608

 

If a payment (of the type you mentioned) is made directly to a lender on your behalf, a gift has still been made by your parent.

 

 

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