Gift tax

[Mauishirley]

Hello,

I want to give each of my 2 kids a gift of roughly $60,000. I understand that since my husband and I file jointly, we can jointly give each kid $36,000 with no taxes, or $18,000 each. Is that right?

However, I was under the impression that the balance of $24,000 would be exempt from taxes as long as i have not gifted the lifetime limit. And fill out a form (can’t remember the number). But, in the other blogs I saw here, it looks like there would be a tax due on the $24,000.

Can anyone clarify this for me?

[Hal_Al]

"Gift Tax" is somewhat of a misnomer.  Even though a gift tax return (Form 709) may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption.
See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/... 

[M-MTax · Accepted solution]

I want to give each of my 2 kids a gift of roughly $60,000.

Strategy = You can give each kid $36,000 (combined) before the end of the year (2024) without filing a 709 gift tax return. You can then give each kid up to $38,000 (combined) in January of 2025 without filing a 709 gift tax return.

As mentioned, you won't owe any tax even if you exceed the annual exclusion unless you are over the lifetime exemption ($13.6 million).

[xmasbaby0]

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.    In 2024 that yearly limit will increase to $18,000.

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

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

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

[M-MTax]

If your gift exceeds the yearly limit ($17,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form

You should update your file. The $17,000 annual exclusion applies to gifts made in 2023. 

The amount rose to $18,000 in 2024 and will rise to $19,000 in 2025.