gifting money to adult children

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brit1
Posts: 2
Joined: Sun Mar 05, 2017 7:52 pm

gifting money to adult children

Post by brit1 » Sun Mar 05, 2017 7:56 pm

Just wondering if it will affect their taxes if I gift them $5K each?

mhalley
Posts: 5140
Joined: Tue Nov 20, 2007 6:02 am

Re: gifting money to adult children

Post by mhalley » Sun Mar 05, 2017 8:07 pm

You are allowed to give anyone (relative or not) up to 14k a year. So you and your wife could give 14 k each to son, and 14 k each to daughter in law, for grand total of 56k with no tax consequences. Plus, the donor is usually the one responsible for any gift taxes.
https://www.irs.gov/businesses/small-bu ... gift-taxes

delamer
Posts: 3118
Joined: Tue Feb 08, 2011 6:13 pm

Re: gifting money to adult children

Post by delamer » Sun Mar 05, 2017 8:09 pm

There will be no tax consequences to them or to you.

HIinvestor
Posts: 1228
Joined: Tue Apr 08, 2014 3:23 am

Re: gifting money to adult children

Post by HIinvestor » Sun Mar 05, 2017 8:34 pm

Anyone can gift $14k/year to any other adult with no federal gift tax consequences to giver or recipient. That's a nice gesture, especially if there are NO strings attached!

clydewolf
Posts: 673
Joined: Tue Jul 21, 2015 12:51 pm

Re: gifting money to adult children

Post by clydewolf » Sun Mar 05, 2017 8:47 pm

Your gift would have no affect on the children's taxes.

But it could provide an opportunity for the children to invest and gains/losses could affect the child's taxes.

JW-Retired
Posts: 6471
Joined: Sun Dec 16, 2007 12:25 pm

Re: gifting money to adult children

Post by JW-Retired » Sun Mar 05, 2017 8:59 pm

Sticking to less than $14k simplifies your gift tax, but any amount of money gifted to someone is not taxable income. It never shows up on their tax return. If someone gifts them stock or real property also no tax, but the gifter's cost basis comes along with it. Only if and when they might sell those assets could there be any capital gain tax consequences for them.

Gifting highly appreciated stock to children who are in a lower or zero cap gains tax bracket has worked nicely for wife and me. :beer
JW
Retired at Last

HIinvestor
Posts: 1228
Joined: Tue Apr 08, 2014 3:23 am

Re: gifting money to adult children

Post by HIinvestor » Mon Mar 06, 2017 2:19 pm

We like gifting our kids so they can put money into retirement/tax-advantaged accounts. They appreciate it as well. ;) Haven't gifted appreciated assets yet, but with D in the zero tax bracket, that's definitely on the horizon.

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