Questions About Tax Exempt Gifts

[Charlie Piozet]

I have several questions regarding tax exempt gifts and the difference between a gift and a loan.

My Mom is 96 years old and ran out of money last year. Three of my siblings paid her monthly expenses for most of 2021. None of the amounts given to Mom exceeded $15,000 from any one of the contributors.

Question 1: Is there a limit on the total of gift amounts an individual can receive from multiple donors without having to report it, as long as no individual donor gives more than $15,000? In 2021 Mom received a total of $28,300 from three different individuals. Does she have to report this amount as income?

Question 2: In January of this year, Mom sold a property that had been on the market for two years and chose to return the gift amounts my three siblings gave her in 2021. Are reciprocal gifts "allowed" by the IRS, or would they be considered as repayment of no-interest loans?

Question 3: Are loans considered as income for tax purposes?

I would really appreciate an authoritative answer to my questions - thanks in advance for help with this.

Charlie Piozet  [email address removed]

[DaveF1006]

Reading your post, I am quite envious and really wish to extend my thanks for helping out your mother. let me answer each of your questions individually.

1. Three individuals can split the gifts equally. Since there is a $15,000 gift exclusion for each individual, you do not need to file a Gift Tax return. I would imagine yourself and your siblings had no expectation on being paid back so your generosities cannot be construed as loans.
2. Your mother returned the money that was lent to her by you and this is a private matter. It is neither a gift or a loan.
3. If it were construed as a loan, loan proceeds are not taxable events because there is an expectation that those loans are to be paid back.