Gift from mother

Gift from mother
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#1

my mother is selling her house and is planning on gifting me and my wife 70,000. is there anyway to take this neither of us to pay taxes on it?

thanks in advance


#2

Hi @kyle.wilford – The annual gift tax exclusion allows an individual to give $15,000 a year (that’s the current maximum) to any individual in any given year – without anyone owing any gift tax. So your mother could give you and your wife $30,000 (that is, $15,000 x 2), assuming she hasn’t given other money to you in the same year.

Any dollar amount above that annual gift tax exclusion counts against the giver’s lifetime exclusion. The current lifetime exclusion amount is $11.4 million. So it’s highly unlikely your mother will owe gift taxes. That said, if she gives more than $15,000 to any one individual in any one year, then she should fill out a gift tax return, which just tells the IRS that she did give that much and the amount over $15,000 starts to chip away at that $11.4 million.

We’ve got a great write-up here on the gift tax: https://www.nerdwallet.com/blog/taxes/gift-tax-rate/

Hope that helps! And if you’re wondering what to do with your windfall, ask away! :slight_smile: We here at NerdWallet are of course big fans of retirement savings, emergency savings and paying down debt…


#3

thank you very much for the detailed response


#4

Hi, @kyle.wilford! Let us know what you get her for Mother’s Day this year. What a generous mom!

A shortcut way to think about gift taxes is that they’re never owed by the person receiving the gift, and they’re almost never owed by the giver, either. You have to give away $11 million + above and beyond the annual exclusion amounts, so this is not a problem that will be faced by too many people.