When are gift taxes due?
And the annual gift exclusion amount is $15,000 for 2018—up from $14,000 where it's been stuck since 2013. The person who makes the gift files the gift tax return, if necessary, and pays any tax. If someone gives you more than the annual gift tax exclusion amount, the giver must file a gift tax return. That still doesn't mean they owe gift tax.
Attorney Tom Olsen: Rose, you're on News 96.5. Go ahead.
Rose: Good morning. I have an elderly relative who wishes to give me a large amount of money. We're not sure how to handle it so that he can save gift taxes or one of us can. I don't really know how it works. She wants to give me $50,000. Then someone advised him something about a loan forgiveness upon his death. What can you tell me about that? How should we handle that?
Attorney Tom Olsen: Rose, is it his intention that this is a loan or is it his intention that this is a gift to you?
Rose: It's his intention that it's a gift. Who's going to pay tax? If he can send gifts to that amount, that's more than $14,000 that he can give me tax free.
Attorney Tom Olsen: I get you, Rose. That's where you're coming. Okay. You're right. Rose, check with your accountant or CPA. The bottom line is this, is that people can give a lot of money from a single person, $11 million upon their death and during their lifetime free of gift taxes. Yes, he may have to note that $50,000 one his tax return next year, but there will not be taxes due on it by him. There'll never be taxes due on it by you. There won't even be taxes due on it by him. Have him check with an accountant or CPA to double-check what I'm telling you.
Rose: I'll do that. Thank you very much.
Attorney Tom Olsen: That part does not concern me.
Rose: Okay. Wonderful.
Attorney Tom Olsen: All right, Rose. Bye-bye.