QUESTION
If I give a gift of 1.5 million dollars to a person will that person have to pay federal and state taxes on it?
Asked on Nov 28th, 2012 on Taxation - North Carolina
More details to this question:
I want to gift someone 1.5 million dollars of a lottery win.
10 ANSWERS
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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The recipient will not have to pay tax. Gifts are not income. You, on the other hand, will need to file gift tax returns and may be required to pay some gift tax.
Answered on Nov 29th, 2012 at 2:46 PM
Elder Law Attorney serving Hollister, CA
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Charles R. Perry
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A bona fide gift is not taxable income to the recipient. The person making this large a gift, however, will have certain obligations under the tax codes, including an obligation to file a federal gift tax return. The gift also will reduce the amount of the estate that can pass without estate taxes. I would immediately consult with an estate-planning and tax attorney, or a highly qualified tax consultant, to discuss the implications of this gift, and tax strategies for making it.
Answered on Nov 29th, 2012 at 2:45 PM
Typically gifts are excluded from a recipients gross income under the Internal Revenue Code. However, there are often Gift and Estate tax implications to the donor that should be discussed with an adviser or attorney before making such a gift.
Answered on Nov 29th, 2012 at 2:43 PM
Trust Attorney serving Cincinnati, OH
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Paul A. Nidich Attorney at Law
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I can't answer that, until Congress gets finished with the "fiscal cliff" problem. Most likely, however, the answer will be no taxes for you. The person receiving the gift doesn't pay taxes on the gift.
Answered on Nov 29th, 2012 at 2:42 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Retain tax counsel.
Answered on Nov 29th, 2012 at 2:41 PM
Tax Attorney serving Portland, OR
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Bullivant Houser Bailey PC
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If you have not previously made substantial taxable gifts and the gift is made this year, the gift will just use up part of your $5,120,000 lifetime exemption. Note: next year the exemption drops to $1,000,000 unless Congress changes the law. You would then have to pay about $200,000 in gift taxes. The recipient would have no income tax obligations as a result of the gift.
Answered on Nov 28th, 2012 at 5:06 PM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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The person who makes the gift pays the gift tax. The person receiving the gift is not taxed - no gift tax, no income tax. You should make the gift prior to 12/31/2012 as the applicable exclusion amount is $5 Million this year and on 1/1/2013 it will drop to $1Million if Congress doesn't act to change that prior to 1/1/2013. Based on the way Congress has been doing business of late it is very likely they will not take the action they need to take.
Answered on Nov 28th, 2012 at 5:06 PM
No, the person you give the gift to will not have to pay? Washington state or federal income taxes on the amount of the gift they receive. However, you as the giver may have to pay Federal and state gift tax.
Answered on Nov 28th, 2012 at 5:05 PM
No, it is a non-taxable gift.
Answered on Nov 28th, 2012 at 5:05 PM
Tax Attorney serving Naples, FL
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Henderson, Franklin, Starnes & Holt, P.A.
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Not if you give it this year. Next year, yes. You will have to file a gift tax return.
Answered on Nov 28th, 2012 at 5:05 PM