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Big gifts and taxes

chloe97chloe97 member
Third Anniversary 100 Love Its 100 Comments Name Dropper
in Chit Chat
Our wedding is this weekend and we are set to get a big cash gift today from FI's parents- like almost pay for our entire 200 person wedding big. This morning, it just occurred to me that the IRS is going to flag the check and that we may have to pay taxes on it. I went to the IRS site and they say that the gift maximum is $14k. This check is bigger than that. Does anybody know about this type of stuff?
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Re: Big gifts and taxes

  • jenna8984jenna8984 member
    5000 Comments Fifth Anniversary 500 Love Its First Answer

    They do not automatically "flag" large checks. The bank has to fill out a report for $10,000+ transactions that happen in CASH.

    I have deposited two checks larger than that before and no one has ever asked where it came from, the reason, or anything. Never had anything to do with my taxes.

                                                                     

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  • luckya23luckya23 member
    1000 Comments 500 Love Its Second Anniversary First Answer

    Gift tax is triggered after giving more than $14k (though I thought it was $13.5k last time I checked) person to person.  So FI's parents together can give you $28k and give FI $28k without filling anything out.  If it's more than that, they need to fill out a form on their taxes saying it's an early inheritance - they can give away something like 3-5 million without incurring gift tax.

    That is how I understand it anyway.

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  • kvrunskvruns member
    Tenth Anniversary 5000 Comments 500 Love Its First Answer
    edited August 2015

    Consult a tax advisor for true tax advice.


    But according to this IRS link the gift tax liability resides with the giver and not the receiver

    http://www.irs.gov/uac/Eight-Tips-to-Determine-if-Your-Gift-is-Taxable  


    Edit: just realized my link was for 2013, rules are the same just limit is different

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  • chloe97chloe97 member
    Third Anniversary 100 Love Its 100 Comments Name Dropper
    Okay this is all very very helpful! We are going to have FMIL talk to her financial advisor before she writes the big check. Given that she's being so generous, we didn't want to put the responsibility on her to figure this out, but if she's the one who is getting dinged by the IRS than she should know this.
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  • Fran1985 Fran1985 member
    Seventh Anniversary 500 Love Its 500 Comments Name Dropper
    jenna8984 said:

    They do not automatically "flag" large checks. The bank has to fill out a report for $10,000+ transactions that happen in CASH.

    I have deposited two checks larger than that before and no one has ever asked where it came from, the reason, or anything. Never had anything to do with my taxes.

    Right because you were receiving the gift. The gift tax is on the giver not the reciever.

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  • Jen4948Jen4948 member
    Knottie Warrior 10000 Comments 500 Love Its 25 Answers
    The IRS doesn't tax the recipient of a gift.
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  • lyndausvilyndausvi mod
    Moderator Knottie Warrior 10000 Comments 500 Love Its
    edited August 2015
    First, it's on the giver.  

    Second each parent can give you $14K each.  So that is $28K.  Each parent can give your spouse $14K each too.  So that is a total $56K your in-laws can give tax free.


    ETA - these are 2015 amounts.  They often change (increase) so you need to check with the IRS in the year you plan on giving the gift.






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