I know that the annual gift tax exclusion is 19k; however, however the term “per recipient” confuses me.
Can a married couple gift a single child more than 19k? Or is that the total threshold before reporting it?
Gift tax exclusion from married couple
byu/Either-Connection-70 inpersonalfinance
Posted by Either-Connection-70
8 Comments
It’s per “Giver”.
A married couple can each gift $19k for a total of $38k.
$19k is not the tax exclusion. Its the annual exclusion to not count against your $14M per person ($28M per couple) lifetime exclusion. If you’re asking on Reddit you’re not going to be gifting $28M. Don’t worry about gift tax. Don’t structure your gifts to be just under the $19k filing requirements. Give your gift.
One thing to keep in mind, because you might not be aware:
The $19k is a REPORTING threshold. The giver would have to REPORT an individual gift over $19,000.
The giver only PAYS gift taxes if they have already gifted over $15 million in their lifetime. That is the current lifetime exclusion limit.
The recipient doesn’t have to do anything, because gifts are not counted as income.
Yes a married couple could gift a single child $38k. If they had 5 children they could gift the each $38k or $190k total.
Strictly speaking, when it comes to gift reporting the IRS considers the total amount transferred in a given year from one particular giver to one particular receiver. Whether anyone involved is married is irrelevant. So a married couple could have $18k given from spouse1 + $18k given from spouse2 both going to a single child recipient, and nothing needs to be reported. Spouse1 could also give up to $19k to a completely different recipient during that same tax year and still have nothing to report.
Also reporting it does not mean taxes will be paid on it. You only pay taxes once you exceed ~14m in giving. Exceeding 19k per year just means it gets counted against that ~14m.
If you’re in the camp where you’re expecting to give more than 14m to one person you should probably be consulting an estate planning specialist. If you’re the other 99.99%+ of us, don’t sweat the reporting.
Just out of curiosity: is there an amount where the recipient would have to report anything?
Yes, a husband and wife can gift a total of $38K to a child (or any other person) each year without having to file a gift tax return, form 709.
A couple gifting to another couple can gift 4 annual exclusions, or currently $76K without having to file a gift tax return. So if your child is married, the real limit for reporting is $76K.