4 ms·

You can't legally gift money above a certain value though without paying taxes on it. The situation depends a lot here, but if it were legal to just gift every

You can't legally gift money above a certain value though without paying taxes on it. The situation depends a lot here, but if it were legal to just gift everybody money without interest nobody would ever have to deal with inheritance taxes.

birken 6y ago
The lifetime gift exemption is more than $10 million dollars, so unless you are really doing a lot of gifting back and forth then you are unlikely to run into that.
- adflux 6y ago
  Hahahah it's like 3500 euro's in Europe. cries in socialism
  - Vespasian 6y ago
    Not at all true in this generality. Germany allows a few 100k tax free every 10 years depending on the exact relationship. + "Usual" Christmas / birthday / marriage gifts etc which can be substantial
  - toomanybeersies 6y ago
    Given that most people will eagerly "gift" most money paid for services, is this a bad thing?
- outside1234 6y ago
  That's not correct - you can only gift up to $15000 a year. ref: https://www.nerdwallet.com/article/taxes/gift-tax-rate#:~:text=In%202020%20and%202021%2C%20you,to%20pay%20a%20gift%20tax https://www.nerdwallet.com/article/taxes/gift-tax-rate#:~:te....
  - kinghajj 6y ago
    "Two things keep the IRS’ hands out of most people's candy dish: the $15,000 annual exclusion in 2020 and 2021, and the $11.58 million lifetime exclusion in 2020 ($11.7 million in 2021). Stay below those and you can be generous under the radar. Go above, and you'll have to fill out a gift tax form when filing returns — but you still might avoid having to pay any gift tax."
    - geoduck14 6y ago
      If you are transferring more than $10k at a time, your bank will have to file "is this a terrorist?" Paperwork with the government. So you should definitely do this A LOT to make them rifle through too much false flags.
  - kileywm 6y ago
    That is close, but not quite correct. You can gift <= $15000 per year without reporting it. You can gift > $15000 federal tax-free (state tax may apply), but must report it. Reporting it doesn't incur federal taxes until your lifetime gift total exceeds your lifetime gift exclusion of $11,700,000 (2021).
    - birken 6y ago
      You can gift $15,000 per person, per year, without counting against the exemption. If you go above that you start to chip into the massive lifetime exemption. Unless you have a net worth way above $10 million dollars you don't need to worry about the gift tax. If you accidentally forgot to report a $30,000 "loan" that turns into a gift to a friend, the IRS isn't going to care. You might have to go back and fix it if they notice but it isn't going to be a problem. The gift tax exists to prevent extremely rich people from cheating the estate tax. If you've never heard of the gift tax before you don't need to worry about.
  - mminer237 6y ago
    It's $15,000 to avoid filing a gift tax return. Anything over comes out of your 10 million dollar lifetime exemption though, so you're still never going to have to pay anything.
Spooky23 6y ago
If you have enough money to have this problem, you have enough money to trivially bypass this problem.

birken 6y ago

The lifetime gift exemption is more than $10 million dollars, so unless you are really doing a lot of gifting back and forth then you are unlikely to run into that.

adflux 6y ago
Hahahah it's like 3500 euro's in Europe. cries in socialism
- Vespasian 6y ago
  Not at all true in this generality. Germany allows a few 100k tax free every 10 years depending on the exact relationship. + "Usual" Christmas / birthday / marriage gifts etc which can be substantial
- toomanybeersies 6y ago
  Given that most people will eagerly "gift" most money paid for services, is this a bad thing?
outside1234 6y ago
That's not correct - you can only gift up to $15000 a year. ref: https://www.nerdwallet.com/article/taxes/gift-tax-rate#:~:text=In%202020%20and%202021%2C%20you,to%20pay%20a%20gift%20tax https://www.nerdwallet.com/article/taxes/gift-tax-rate#:~:te....
- kinghajj 6y ago
  "Two things keep the IRS’ hands out of most people's candy dish: the $15,000 annual exclusion in 2020 and 2021, and the $11.58 million lifetime exclusion in 2020 ($11.7 million in 2021). Stay below those and you can be generous under the radar. Go above, and you'll have to fill out a gift tax form when filing returns — but you still might avoid having to pay any gift tax."
  - geoduck14 6y ago
    If you are transferring more than $10k at a time, your bank will have to file "is this a terrorist?" Paperwork with the government. So you should definitely do this A LOT to make them rifle through too much false flags.
- kileywm 6y ago
  That is close, but not quite correct. You can gift <= $15000 per year without reporting it. You can gift > $15000 federal tax-free (state tax may apply), but must report it. Reporting it doesn't incur federal taxes until your lifetime gift total exceeds your lifetime gift exclusion of $11,700,000 (2021).
  - birken 6y ago
    You can gift $15,000 per person, per year, without counting against the exemption. If you go above that you start to chip into the massive lifetime exemption. Unless you have a net worth way above $10 million dollars you don't need to worry about the gift tax. If you accidentally forgot to report a $30,000 "loan" that turns into a gift to a friend, the IRS isn't going to care. You might have to go back and fix it if they notice but it isn't going to be a problem. The gift tax exists to prevent extremely rich people from cheating the estate tax. If you've never heard of the gift tax before you don't need to worry about.
- mminer237 6y ago
  It's $15,000 to avoid filing a gift tax return. Anything over comes out of your 10 million dollar lifetime exemption though, so you're still never going to have to pay anything.

Spooky23 6y ago

If you have enough money to have this problem, you have enough money to trivially bypass this problem.