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Reply to "What is the max per year parents can gift children tax free?"
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[quote=Anonymous]This question comes up a lot. Here are the rules: 1. Any one individual can give any other individual up to $18k in a calendar year (as of 2024) without any reporting required. Yes that means a married couple can give one of their children a total of $36k, and then another $36k to their child's spouse. This $18k annual amount is called the gift tax exclusion. You can give this amount and there are zero tax implications. 2. If you give more than $18k in a year to one individual, you have to fill out IRS Form 709 as part of your tax return for the year you gave the large gift. This is a form to track how much you are giving over the course of a persons lifetime. Note that this does NOT mean you owe taxes on the amount above $18k. That only comes into play if: 3. You give an individual more than $13 million over the course of their life, as indicated by totaling the amounts on your Form 709s over the years. Once you cross that threshold, you owe 40% taxes on the amounts above it, including from your estate. Form 709 is a 5 page form, it's a bit complicated. All regular tax software will be able to fill it out for you.[/quote]
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