4 ms·

That doesn't sound right The per year limit for 2023 is 17,000. A 11M lifetime limit would mean 647 years of giving. I think the 11M figure is just totally

That doesn't sound right The per year limit for 2023 is 17,000. A 11M lifetime limit would mean 647 years of giving. I think the 11M figure is just totally way off. Not sure where they are getting that from.

lotsofpulp 4y ago
https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax https://www.irs.gov/businesses/small-businesses-self-employe... Scroll down to ”Basic Exclusion Amount for Year of Death” The gift giver pays the tax, but only after they give more than the lifetime amount.
- theonething 4y ago
  So that's an estate tax upon death. But given we're talking about loans and gifts while a person is living, I think the correct tax to invoke is the gift tax that has a limit of $17,000 per year. https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe...
  - lotsofpulp 4y ago
    If taxpayer A gifts taxpayer B $1M today, taxpayer B owes $0 in taxes to the US federal government. Taxpayer A also owes $0, assuming that is all they have gifted in their life. But they do have to file a form with the IRS tabulating the total they have gifted, minus the annual exclusion ($17k). Neither taxpayer A nor taxpayer B have a federal tax liability for gifting more than the annual exclusion amount. So I do not see how the gift tax, which would implicitly involve a tax liability for the gift, has a limit of $17k. Am I incorrect?
    - theonething 4y ago
      > If taxpayer A gifts taxpayer B $1M today, taxpayer B owes $0 in taxes to the US federal government. If A is alive when that happens then that is wrong. B will be taxed on the amount of $1M - 17k because the gift tax applies not the estate tax. If A were dead and gifted B in their will, then you would be correct because the estate tax applies in this scenario. Again, since we're taking about loans and gifts while a person is alive in this thread, the first scenario of the gift tax applies.
      - greyface- 4y ago
        This is incorrect. Taxpayers are allowed to apply their lifetime gift exclusion before death. Line 7 on Part 2 of Form 709. https://www.irs.gov/pub/irs-pdf/f709.pdf https://www.irs.gov/pub/irs-pdf/f709.pdf https://www.irs.gov/pub/irs-pdf/i709.pdf#page=20 https://www.irs.gov/pub/irs-pdf/i709.pdf#page=20
        theonething 4y ago
        I stand corrected. Thank you.
      - lotsofpulp 4y ago
        A gift recipient does not owe tax, so taxpayer B never owes any tax for receiving a gift. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe... >Who pays the gift tax? > The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.
        theonething 4y ago
        Ok, after a little more research, I think you're right and I stand corrected. Thank you for your patience!

lotsofpulp 4y ago

https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax https://www.irs.gov/businesses/small-businesses-self-employe... Scroll down to ”Basic Exclusion Amount for Year of Death” The gift giver pays the tax, but only after they give more than the lifetime amount.

theonething 4y ago
So that's an estate tax upon death. But given we're talking about loans and gifts while a person is living, I think the correct tax to invoke is the gift tax that has a limit of $17,000 per year. https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe...
- lotsofpulp 4y ago
  If taxpayer A gifts taxpayer B $1M today, taxpayer B owes $0 in taxes to the US federal government. Taxpayer A also owes $0, assuming that is all they have gifted in their life. But they do have to file a form with the IRS tabulating the total they have gifted, minus the annual exclusion ($17k). Neither taxpayer A nor taxpayer B have a federal tax liability for gifting more than the annual exclusion amount. So I do not see how the gift tax, which would implicitly involve a tax liability for the gift, has a limit of $17k. Am I incorrect?
  - theonething 4y ago
    > If taxpayer A gifts taxpayer B $1M today, taxpayer B owes $0 in taxes to the US federal government. If A is alive when that happens then that is wrong. B will be taxed on the amount of $1M - 17k because the gift tax applies not the estate tax. If A were dead and gifted B in their will, then you would be correct because the estate tax applies in this scenario. Again, since we're taking about loans and gifts while a person is alive in this thread, the first scenario of the gift tax applies.
    - greyface- 4y ago
      This is incorrect. Taxpayers are allowed to apply their lifetime gift exclusion before death. Line 7 on Part 2 of Form 709. https://www.irs.gov/pub/irs-pdf/f709.pdf https://www.irs.gov/pub/irs-pdf/f709.pdf https://www.irs.gov/pub/irs-pdf/i709.pdf#page=20 https://www.irs.gov/pub/irs-pdf/i709.pdf#page=20
      - theonething 4y ago
        I stand corrected. Thank you.
    - lotsofpulp 4y ago
      A gift recipient does not owe tax, so taxpayer B never owes any tax for receiving a gift. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe... >Who pays the gift tax? > The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.
      - theonething 4y ago
        Ok, after a little more research, I think you're right and I stand corrected. Thank you for your patience!