Gifted money.
If I was gifted a large sum of money, do I have to pay the gift tax or does the giver pay the tax?
Also, do I need to claim on my taxes?
Best Answer
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Hey AMN!
The IRS states, "In most cases, property you receive as a gift, bequest, or inheritance isn't included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you." Link
If the gift you received isn't taxable, then it does not need to be included anywhere on your return.
There is a such thing as a gift tax, which is paid via filing a Gift Tax Return, however the responsibility to pay that tax falls on the giver (except under special arrangements, then the receiver may agree to pay the tax instead). However, most people don't need to file a gift tax return. You only need to file a gift tax return if you gave away more than $17,000 to one person.
Even if you gave away more than $17,000 to someone in 2023, you won't owe any gift taxes until you have given away more than $12.092 million over your lifetime. The gift tax and estate tax are connected and the $12.092M lifetime exemption is used up by gifts over the $16,000 threshold and by the amount of the estate after death.
