I could be wrong, but I thought that the $500K would not count as income for them, but would deduct from your lifetime estate tax exclusion. See https://www.ne

I could be wrong, but I thought that the $500K would not count as income for them, but would deduct from your lifetime estate tax exclusion. See https://www.nerdwallet.com/article/taxes/gift-tax-rate https://www.nerdwallet.com/article/taxes/gift-tax-rate