Question

Gifting

Forum|Forum|2 years ago
October 25, 2023
1 reply
0 views

My husband and I are about to start building a new construction house. How can his parents gift us $500,000 and avoid any additional tax penalties?

Ask the Experts - Extension - Sept 2023

X

xmasbaby0

Employee

Gifts given to family members, friends or other individuals are not deductible. Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($17,000 per individual) imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.

TurboTax does not support Form 709. It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

https://www.irs.gov/pub/irs-pdf/f709.pdf

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

S

SauerAuthor

So to confirm, if my husband's parents gift $500,000 in tax year 2023 they would have no tax liability on this transaction because I can confirm their lifetime gifts are zero. Their only obligation would be to file form 709 with their income tax return that just identifies the gift. Also to confirm, us as the recipients will have no tax liability on their gift to us.

X

xmasbaby0

Employee

That is correct. You do not enter anything about receiving the gift from them on your tax return. Parents who give $500K are required to complete and mail in Form 709.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**