January 24, 2022
Q. I’m thinking about gifting money to my children, is there a maximum and do they pay tax on that gift?
A. Gifting money to your children is certainly very generous. Of course, we always want to run scenarios to make sure that your generosity will still allow you to live your dreams.
In short, you can give as much as you want, and they won’t pay tax on the funds.
However, if you give over $16,000 ($32,000 per couple) to any individual, you will need to file Form 709.
The current lifetime gift tax exclusion for 2022 is $12,060,000. The annual exclusion does not count towards the lifetime exclusion.
If you are thinking about gifting at these levels, we encourage you to work jointly with us and with an estate planning attorney. There are still lookback provisions on gifts, so don’t confuse these IRS limits with your State Medicaid rules (each state is different, and all are complex).
Do your friends ask you financial questions? Pass those questions on to us at AskRPG@rootedpg.com and we will feature them in our future newsletters and post them here.