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