Do I have to pay taxes for giving him a gift? 2 Answers as of January 16, 2011

My son lives in CA, and I live in TX,. I am planning to pay for his rent directly to the rental company, and also gives him $13,000 as gift this year. Do I have to pay gift tax?

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Javia & Moore
Javia & Moore | Marisa-Andrea Moore
That's a great question. Generally, the donor is responsible for paying a gift tax unless you have a special arrangement where the donee agrees to pay the gift OR your gift is not more than the annual exclusion for the calendar year. Currently, the annual exclusion for gifts made on or after January 1, 2009 is $13,000. That being said, you would not have to pay a gift tax on the $13,000 that you plan to give to your son. Concerning the rent, there may be some special deductions you may be able to take that go beyond the scope of this email. Please consult with a qualified tax attorney.
Answer Applies to: California
Replied: 1/16/2011
Givner & Kaye
Givner & Kaye | Bruce Givner
You have a lifetime gift exclusion of $5,000,000. In other words, you do not have to PAY a gift tax until your total gifts exceed $5,000,000. However, you have to report your gifts (file a gift tax return (IRS Form 709)) when your gifts exceed $13,000 per person per year. That is, of course, a very general answer. You should consult with the CPA who prepares your income tax return.
Answer Applies to: California
Replied: 1/16/2011
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