If I give a gift of 1.5 million dollars to a person will that person have to pay federal and state taxes on it? 13 Answers as of November 29, 2012

I want to gift someone 1.5 million dollars of a lottery win.

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Irsfeld, Irsfeld & Younger LLP | Norman H. Green
The recipient will not have to pay tax. Gifts are not income. You, on the other hand, will need to file gift tax returns and may be required to pay some gift tax.
Answer Applies to: California
Replied: 11/29/2012
Steven J. Fromm
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
No but you do. The winning is taxable income to you. Gifts are not taxable income. Note, you must file a gift tax return, a Form 709, to report this gift. You will use an annual done exclusion of $13,000 and the rest of the gift will utilize your lifetime exemption currently at $5,120,000 (next year goes to $1,000,000).
Answer Applies to: Pennsylvania
Replied: 11/29/2012
Law Offices of Charles R. Perry
Law Offices of Charles R. Perry | Charles R. Perry
A bona fide gift is not taxable income to the recipient. The person making this large a gift, however, will have certain obligations under the tax codes, including an obligation to file a federal gift tax return. The gift also will reduce the amount of the estate that can pass without estate taxes. I would immediately consult with an estate-planning and tax attorney, or a highly qualified tax consultant, to discuss the implications of this gift, and tax strategies for making it.
Answer Applies to: California
Replied: 11/29/2012
Musilli Brennan Associates PLLC
Musilli Brennan Associates PLLC | John F Brennan
Retain tax counsel.
Answer Applies to: Michigan
Replied: 11/29/2012
The Schreiber Law Firm
The Schreiber Law Firm | Jeffrey D. Schreiber
No, because it is not income to them. However, you could have a gift tax liability.
Answer Applies to: California
Replied: 11/29/2012
    Tax Law Center | Derek N. Hatch, Esq.
    Typically gifts are excluded from a recipients gross income under the Internal Revenue Code. However, there are often Gift and Estate tax implications to the donor that should be discussed with an adviser or attorney before making such a gift.
    Answer Applies to: Nevada
    Replied: 11/29/2012
    Paul Nidich, Attorney at law
    Paul Nidich, Attorney at law | Paul Nidich
    I can't answer that, until Congress gets finished with the "fiscal cliff" problem. Most likely, however, the answer will be no taxes for you. The person receiving the gift doesn't pay taxes on the gift.
    Answer Applies to: Ohio
    Replied: 11/29/2012
    The Mills Law Office LLC
    The Mills Law Office LLC | Darren J Mills
    As a general matter, gifts are not subject to income tax (IRC sec. 102). If the gift is made by 12.31.12, generally, there should not be any gift tax due (which is generally a liability of the donor). A Form 709 would still have to be filed since the $1.5 million would exceed the annual exclusion of $13,000. I suggest you consult with an estate planning attorney near you given the sizeable amount of the gift so he/she can properly advise you based on the specific facts and circumstances. Pending Congressional action with the looming fiscal cliff will also make it a good time to re-visit your personal overall estate tax situation.
    Answer Applies to: New Jersey
    Replied: 11/29/2012
    TrustCounsel | Gregory Herman-Giddens
    Not if you give it this year. Next year, yes. You will have to file a gift tax return.
    Answer Applies to: North Carolina
    Replied: 11/28/2012
    Bullivant Houser Bailey PC
    Bullivant Houser Bailey PC | Darin Christensen
    If you have not previously made substantial taxable gifts and the gift is made this year, the gift will just use up part of your $5,120,000 lifetime exemption. Note: next year the exemption drops to $1,000,000 unless Congress changes the law. You would then have to pay about $200,000 in gift taxes. The recipient would have no income tax obligations as a result of the gift.
    Answer Applies to: Oregon
    Replied: 11/28/2012
    Edward L. Armstrong, P.C. | Edward L. Armstrong
    The person who makes the gift pays the gift tax. The person receiving the gift is not taxed - no gift tax, no income tax. You should make the gift prior to 12/31/2012 as the applicable exclusion amount is $5 Million this year and on 1/1/2013 it will drop to $1Million if Congress doesn't act to change that prior to 1/1/2013. Based on the way Congress has been doing business of late it is very likely they will not take the action they need to take.
    Answer Applies to: Missouri
    Replied: 11/28/2012
    U.S. Tax Relief, LLC | Dale Heider
    No, it is a non-taxable gift.
    Answer Applies to: Colorado
    Replied: 11/28/2012
    Law Offices of Neil Sussman
    Law Offices of Neil Sussman | Neil Sussman
    No, the person you give the gift to will not have to pay? Washington state or federal income taxes on the amount of the gift they receive. However, you as the giver may have to pay Federal and state gift tax.
    Answer Applies to: Washington
    Replied: 11/28/2012
Click to View More Answers:
12 3 Free Legal QuestionsConnect with a local attorney