hey guys if anyone can help me I would greatly appreciate it. Im CRC citizen and my youngest brother left CRC and moved to the USA cause he married an american. He's been a US citizen for like 7 years now, tax payer fully compliant citizen.
The issue I need help with is that I remember reading here a while ago that you could get some family contribution/donation and not having to pay tax on it; now, I dont remember if the max amount was 70k but I'd like to know if this is true and if it is true, how does it work?
do you have to send the full amount to pass it as family cont?
can it be done on a monthly basis?
Thanks in advance
I assume you're talking about a gift from one living person (or people) to another in the United States
1) Gifts are NEVER subject to income taxes. There's no deduction on one end, it's NOT income on the other end. Regardless of how much is gifted, there are NO income tax consequences.
2) There may be gift tax consequences, but even that's rare at the federal level. Any individual can give any other individual up to $ 15,000 per year without any tax or reporting issues at the federal level. I'm emphasizing federal level because I'm not going to pretend I know the gift tax laws for all 50 states.
3) If someone gives more than $ 15,000 to any one individual in any calendar year, then a Gift Tax Return is supposed to be filed it's unlikely there will be any gift tax due. It's just a form that needs to be submitted for informational purposes only.
Here's the reason for this absurd law. Anyone with an estate > $ 11,400,000 has to pay death taxes on the value over $ 11,400,000. The government doesn't want people giving away their assets to avoid this tax, so they implemented gift tax laws. At the end of the day, if you give a gift > $ 15,000, you're only reducing your estate tax exemption of $ 11,400,000
Here's the process. Somebody gives $ 100,000 to their child, that's an excess gift of $ 85,000. So we would file a gift tax return that reduces the estate tax exemption by $ 85,000.
$ 11,400,000 - $ 85,000 = 11,315,000. The person who gave the money now has an estate tax exemption of $ 11,315,000. No gift taxes are due until that estate tax exemption is zero
Obviously, very few people in the country ever pay any gift taxes to the IRS. But I do get to charge people for filing gift tax returns every year.
It's bureaucratic bullshit, I know this all sounds asinine, but it's real, very real.
