Solved

Why do one-time gifts over $15k need to be reported to the IRS if the lifetime limit is $11.7 mil? Will I get taxed this year if I give one gift over $15k?

Forum|Forum|4 years ago
October 7, 2021
1 reply
0 views

The gift is a vehicle and it would not be going to anyone in my immediate family so it doesn't qualify for an immediate family exclusion according to the IRS. IRS says Form 709 is required for gifts over $15k, so does that mean come tax season I will be responsible for the valued taxes on that gift? I've seen that even though the form is required by IRS, they don't collect the taxes until you hit the lifetime limit of $11.7 million. Is that accurate?

TurboTax Deluxe Online

Best answer by xmasbaby0

@cwtaxdummy wrote:

Why does the IRS say that if I give one single person a one time gift of $26,000 today, I'm responsible for filling out and submitting Form 709.....

The extra $11,000 in your hypothetical ($26,000 less $15,000 annual exclusion) counts against your lifetime exemption, which will appear on your Form 709.

@cwtaxdummy

" Why does the IRS say that if I give one single person a one time gift of $26,000 today, I'm responsible for filling out and submitting Form 709 AND I'm responsible for paying gift taxes on it. "

The IRS does not say you will pay gift tax on the $26,000. The tax law says you have to report the gift if it is over $15,000, so that the IRS can track your gifts in case you someday go past the lifetime limit and need to pay.

T

TomD8

Employee

The current lifetime gift tax exemption is actually $11.7 million. This means that you can give up to $11.7 million in gifts over the course of your lifetime without ever having to pay gift tax. But gifts over $15K must be reported to the IRS on Form 709.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

C

cwtaxdummyAuthor

@TomD8 That's where I get confused. IE - Why does the IRS say that if I give one single person a one time gift of $26,000 today, I'm responsible for filling out and submitting Form 709 AND I'm responsible for paying gift taxes on it. But then they turn around and say well actually, the lifetime limit is $11.7 million. Why not just say, if you give a one time gift over $15,000 you need to report it to the IRS but you won't be responsible for any taxes on that gift unless you give away more than $11.7 million in your lifetime? Am I interpreting that incorrectly?