If I give my parents a million dollars will I have to pay taxes on it?

Question

I would be giving this amount in 2013 also I haven't gifted any amounts to anyone before.

Robert Long · Answer

Some experts are urging people in your position to make the gift in 2012, and not wait until the TRUIRJCA expires on December 31, 2012. If you can afford a gift in that amount, you can certainly afford to pay an attorney that specializes in estate planning for high-wealth individuals for a consultation to explain the options.

Frances Headley · Answer

If you give above the yearly amount of exemption in any one year [currently 13,000 per done] then the rest may be subject to gift tax even though you haven't used any of your lifetime exemption.  You should consult your CPA  and a tax attorney to advise you.

Don Rosenberg · Answer

If you use your lifetime gift exemption then no you will not have to pay estate/gift taxes.  However, there is a clear advantage of making the gift in 2012 as the exemption is currently 5.12 million and next year it may return to 1 million only.  Would welcome the opportunity to counsel you.

John J. Carney · Answer

They will have to pay taxes on the money you give them. You should talk to a tax lawyer to discuss the best way to minimize the tax consequences of the transaction.

Norman Green · Answer

You would need to file a gift tax return, but would incur no tax.  You would use up about $972,000 of your lifetime exclusion amount.

James Oberholtzer · Answer

No, so long as you do it before year end.  Usually you want to avoid giving large sums to an older generation.  It will face an estate tax when they pass.  You may want to make the gift in trust or combine it with gifts to others.

Carl Silver · Answer

Yes you will have to pay taxes as per the gift tax return you will need to file.

Jayne Sebby · Answer

Yes, you will have to pay federal taxes on anything over $10,000 per person per year.  State taxes will depend on the state you live in.

Edwin Fee · Answer

We do not yet know what the federal gift tax exemption will be in 2013, but it is likely to be at least $1,000,000.  So you probably won't have to pay any gift tax.  The gift tax exemption is $5,120,000 in 2012.  So, if possible, you should consider making the gift before the end of the year.  Also, your parents should arrange their estate planning so that the $1,000,000 doesn't come back to you in the event of their deaths, because this would waste the use of your gift tax exemption.

Kenneth Gold · Answer

Probably not but you would need to file a gift tax return. Depends on what if any changes in the law are enacted for 2013. I suggest you talk to an estate planning and or tax attorney.

Darin Christensen · Answer

No, but you will have to file a gift tax return (form 1041) to report the gift.

Victor Waid · Answer

You are advised to seek the services of a CPA to advise you, that specializes in federal tax of individuals, and what is required, to protect yourself and what your tax liability would be if any.

James Frederick · Answer

No. You would need to REPORT this gift, by completing a gift tax return. If the law stays as it is, $1,000,000 would exhaust your lifetime exemption for gift and estate tax purposes. Whether or not this is a good idea is something you should discuss with an attorney.

Neal Michael Rimer · Answer

You might not have to "pay" taxes on the gift but you will erode your unified credit. Giving a gift like this to a parent is usually not a good idea, if they then die and the money comes back to you, there could be a tax then too. Usually there are other alternatives that would work out better in helping your parents.

Brian Haggerty · Answer

It is not possible to say at this time what the exemption from federal estate and gift taxes will be in 2013. The Congress must act on this; if Congress does not, then you would have only a million dollar exemption, and your gift to your parents would use it up  no tax, but you'd have to file a gift tax return and show the application of your exemption. In general, it makes no sense to make gifts to the older generation; you just risk that money being taxed in their estates when they pass away. If you're thinking of a million-dollar gift, you should spend a few bucks on some estate planning, and see if there aren't better ways of achieving your goals.

Paul Nidich · Answer

If you are seriously considering giving your parents a million dollars, you need to see an estate planning attorney.  Giving money to an older generation is generally an idea that needs to be discussed with a qualified professional and made a part of a multi-generational estate plan.  The taxes are generally an insignificant consideration.  By the way, the answer is no.

John Brennan · Answer

Gift and estate tax are up in the air at this time, 2013 is uncertain at best.  You should see an estate planning attorney ASAP as it may be your plans will be adversely impacted by the changes and you may wish to make some of your moves prior to the end of 2012..

Edward Armstrong · Answer

We are not sure what Congress will do with estate and gift taxes. If they do nothing, the exclusion  from gift tax will be $1 Million. The first $13,000 to each parent would be excluded. There will, in all probability, be enough exclusion to shelter the gifts to them from tax. You must, however, file a Federal Gift Tax Return (Form 709) which will be due April 15, 2014 if you do make the gift in 2013.

Dara J. Goldsmith · Answer

If you have not made taxable gifts previously, and you are a US citizen then you should have your entire $5.12 million dollar gift tax exemption available in 2012.  That amount is probably going down to $1,000,000 in 2013.  You should speak with an attorney or tax advisor to address the specifics.  It would probably be much more advantageous to give the money this year instead of next.   If you earned this money in 2012, you will still need to pay income taxes on the monies.

Thomas Edward Gates · Answer

Yes, you would be required to pay taxes.  You can gift $13,500 per person each year (or whatever amount the tax code currently allows.

Gregory Herman-Giddens · Answer

If you make the gift in 2013, you will not owe any gift tax, but you will use up all of your gift and estate tax exemption (which is scheduled to be $1 million next year).  That means at your death, the first dollar will be subject to estate tax.  You will also be required to file a 2013 federal gift tax return.

Ben Liu · Answer

Probably not; but the laws are in flux. The gift and estate tax tax laws may change in 2013. But you should see an attorney about an estate plan for you since you have substantial assets.

Neil Lehto · Answer

Anybody gifting $1 million should be seeking legal and tax advice from a qualified professional because the so-called "fiscal cliff" in the news since the Election could make drastic changes in federal law applicable to large  gifts made this year or next. Federal gift taxes are due from the person making the gift. There are lifetime exemptions that may apply to most gifts under existing federal law that changes if the U.S. Congress and the President do not stop us from going over the "fiscal cliff."  And it would change again next year if the U.S. Congress and the President agree on new tax laws next year as they likely would.

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If I give my parents a million dollars will I have to pay taxes on it?

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