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
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
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
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
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
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