Does this deposit break the gift limit for 2020?

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Topic Author
financial.freedom
Posts: 577
Joined: Fri Oct 03, 2014 1:18 am

Does this deposit break the gift limit for 2020?

Post by financial.freedom »

My parents decided to each give me a 10k check as a gift for 2020.

They said they're allowed to each give me up to 15k before exceeding the gift limit -- is this correct? I'm concerned that because they have the same last name and both checks are from the same checking account the IRS could view it as a single gift of 20k.

Thank you in advance!
HomeStretch
Posts: 5740
Joined: Thu Dec 27, 2018 3:06 pm

Re: Does this deposit break the gift limit for 2020?

Post by HomeStretch »

Yes, each parent can gift you up to $15,000 in 2020 before a gift tax return would need to be filed.
GreenerPastures
Posts: 15
Joined: Sat Jan 19, 2019 6:48 pm

Re: Does this deposit break the gift limit for 2020?

Post by GreenerPastures »

They are correct. Each of them may gift you up to $15k per year. :D Be sure to give them a hug!
Topic Author
financial.freedom
Posts: 577
Joined: Fri Oct 03, 2014 1:18 am

Re: Does this deposit break the gift limit for 2020?

Post by financial.freedom »

Thank you for the replies. This was really unexpected. Definitely will give them a big hug. Plan is to put it into 529 -- now I have to figure out the limit for that as well.

Cheers!
GreenerPastures
Posts: 15
Joined: Sat Jan 19, 2019 6:48 pm

Re: Does this deposit break the gift limit for 2020?

Post by GreenerPastures »

They may also gift your spouse up to 15k per year. Double hug :D
dukeblue219
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Joined: Fri Jan 29, 2016 12:40 pm

Re: Does this deposit break the gift limit for 2020?

Post by dukeblue219 »

financial.freedom wrote: Mon Feb 03, 2020 9:59 pm My parents decided to each give me a 10k check as a gift for 2020.

They said they're allowed to each give me up to 15k before exceeding the gift limit -- is this correct? I'm concerned that because they have the same last name and both checks are from the same checking account the IRS could view it as a single gift of 20k.

Thank you in advance!
Even if it did (perhaps they had already each given you $10k already) it would be their problem, not yours, and all it would do is force them to fill a form, and it would count against their estate taxes when they pass on.

There's also not really any active reporting for this sort of thing. Oh don't get me wrong, you don't want to mess with the IRS by hiding anything, but I sense from your post you are worried that the bank may report your checks and an automated system might flag them. Not gonna happen.
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MP123
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Re: Does this deposit break the gift limit for 2020?

Post by MP123 »

GreenerPastures wrote: Mon Feb 03, 2020 10:21 pm They may also gift your spouse up to 15k per year. Double hug :D
And your child (I assume) with the 529 too.
student
Posts: 5381
Joined: Fri Apr 03, 2015 6:58 am

Re: Does this deposit break the gift limit for 2020?

Post by student »

They are using two checks, there should be no problem. To make it even clearer, maybe one check says from Dad and the other one says from Mom in the memo section.
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Cubicle
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Re: Does this deposit break the gift limit for 2020?

Post by Cubicle »

Showing this thread to my parents tomorrow with an open palm...
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓
Financologist
Posts: 302
Joined: Wed Jan 01, 2020 11:16 pm

Re: Does this deposit break the gift limit for 2020?

Post by Financologist »

Are you the long-term care plan?
Financologist
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