Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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I know that my wife and I can each give $14,000 tax-free per year to our child without it counting against the lifetime exclusion. We can also each give $14,000 tax-free per year to my brother and his wife (who don't need the money). So suppose my wife and I each give $7,000 tax-free to each of my brother and his wife. Can my brother and his wife then give this $28,000 tax-free to our child?
Yes, this has been discussed frequently and at length in numerous threads. It violates what is known as the Step Transaction Doctrine. Quite sinply, the IRS will ignore the intermediate steps and treat the transaction for its real intent.