If I receive a cash gift of $80,000, do I have to pay taxes on that amount?
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Gift Taxes
IRS Tax Tip 2007-39
If you gave any one person gifts in 2006 that valued at more than $12,000, you must report the total gifts to the Internal Revenue Service and may have to pay tax on the gifts.
The person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value. <<<<
Gifts include money and property, including the use of property without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift.
There are some exceptions to the tax rules on gifts. The following gifts do not count against the annual limit:
Tuition or Medical Expenses that you pay directly to an educational or medical institution for someone's benefit Gifts to your Spouse Gifts to a Political Organization for its use Gifts to Charities If you are married, both you and your spouse can give separate gifts of up to the annual limit to the same person without making a taxable gift.
For more information, get the IRS Publication 950, Introduction to Estate and Gift Taxes, IRS Form 709, United States Gift Tax Return, and Instructions for Form 709. They are available at the IRS Web site at IRS.gov in the Forms and Publications section or by calling 800-TAX-FORM (800-829-3676).
Links:
Publication 950, Introduction to Estate and Gift Taxes (PDF 44K) Form 709, United States Gift (And Generation-Skipping Transfer) Tax Return (PDF 300K) Form 709, Instructions (PDF 79K)
Good luck !!
cashgiftmagic is wrong
The receiver of the gift does NOT have to report the gift as income or pay taxes on the money received regardless of the amount.
The person who is giving the gift may need to report the gift if the amount is greater than the annual exclusion for the "GIVER / DONOR" giving the gift.
As stated from above "The person who receives the gift does not have to report the gift to the IRS or pay gift or income tax on its value."
The "giver / donor" is the person who needs to determine if they will need to pay any "gift tax".
More info regarding cash gifting at: http://www.cashgiftingcashgifting.com
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If one person gives $20,000 in cash to another person, what is the government's role in this. Where is it involved in the exchange? It's done nothing, and yet it has a right to something. Why is this acceptable? Why do people stand for this abuse? This is ethically wrong.
I believe the max for a tax free cash gift is $10,000 - but, I'd strongly recommend you talk to a tax professional at some point, as you don't want to spend all the money, only to find out later that you owe a bunch in taxes for which you can't pay.
He is right you only have to report taxes if you receive more then $12,00 from one particular individual. Make sure you keep all your non solicitation and gifting letters to be safe.
http://receivecashgifts.info
Take note that an individual can gift any amount to a disabled child without any tax ramifications on either side. I'd still suggest filing the appropriate forms however.
