If I give my parents a million dollars will I have to pay taxes on it? 37 Answers as of November 29, 2012

I would be giving this amount in 2013 also I haven't gifted any amounts to anyone before.

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

Free Case Evaluation by a Local Lawyer: Click here
The Taylor Law Office L.L.C.
The Taylor Law Office L.L.C. | Ian A. Taylor
The gift tax limit for 2013 will be 13,000. If you exceed the limits, you could wind up owing gift tax of up to 35%.
Answer Applies to: South Carolina
Replied: 11/29/2012
LAW OFFICE OF ROBERT I LONG
LAW OFFICE OF ROBERT I LONG | Robert I. Long
Some experts are urging people in your position to make the gift in 2012, and not wait until the TRUIRJCA expires on December 31, 2012. If you can afford a gift in that amount, you can certainly afford to pay an attorney that specializes in estate planning for high-wealth individuals for a consultation to explain the options.
Answer Applies to: California
Replied: 11/27/2012
Law Office of Pamela Braynon | Pamela Y. Braynon
Yes they will. Anything over $13,000.00 is taxed by the federal government and the state of Florida.
Answer Applies to: Florida
Replied: 11/25/2012
Law Offices of Frances Headley | Frances Headley
If you give above the yearly amount of exemption in any one year [currently 13,000 per done] then the rest may be subject to gift tax even though you haven't used any of your lifetime exemption. You should consult your CPA and a tax attorney to advise you.
Answer Applies to: California
Replied: 11/23/2012
The Mills Law Office LLC
The Mills Law Office LLC | Darren J Mills
Regarding any potential gift tax, if done prior to 12.31.2012 the answer is no and the same should hold true if done after 12.31.12 when the Bush tax cuts expire; assuming no Congressional action regarding the fiscal cliff (it is highly unlikely that Congress would enact legislation that lowers the life time exemption below $1 million). You will have to file a gift tax return (Form 709). If you are married, you and your spouse can elect to split the gift (Form 709 required to do so) and you may be able to gift $500,000 each to your mother and father and utilize more of the annual exclusion. If by chance the money is for medical, payments directly to the provider may qualify as a non-taxable gift thereby preserving more of your life time exclusion. Finally, and as a general matter, the recipient does not have to include the gift in income. Given the large amount of the gift, it is EXTREMELY prudent to properly document your intentions to buttress any potential attacks by the IRS that the transfer is something other than a gift.
Answer Applies to: New Jersey
Replied: 11/23/2012
    Martinson & Beason, PC
    Martinson & Beason, PC | Douglas C Martinson II
    If you are going to give your parents $1m, you should do it this year as there is a $5m exemption from gift taxes that expire this year. You need to consult with a Tax Attorney and your CPA on this asap.
    Answer Applies to: Alabama
    Replied: 11/23/2012
    The Center for Elder Law
    The Center for Elder Law | Don Rosenberg
    If you use your lifetime gift exemption then no you will not have to pay estate/gift taxes. However, there is a clear advantage of making the gift in 2012 as the exemption is currently 5.12 million and next year it may return to 1 million only. Would welcome the opportunity to counsel you.
    Answer Applies to: Michigan
    Replied: 11/22/2012
    The Law Offices of John J. Carney Esq.
    The Law Offices of John J. Carney Esq. | John J. Carney
    They will have to pay taxes on the money you give them. You should talk to a tax lawyer to discuss the best way to minimize the tax consequences of the transaction.
    Answer Applies to: New York
    Replied: 11/22/2012
    Irsfeld, Irsfeld & Younger LLP | Norman H. Green
    You would need to file a gift tax return, but would incur no tax. You would use up about $972,000 of your lifetime exclusion amount.
    Answer Applies to: California
    Replied: 11/22/2012
    James Oberholtzer, Attorney at Law
    James Oberholtzer, Attorney at Law | James Oberholtzer
    No, so long as you do it before year end. Usually you want to avoid giving large sums to an older generation. It will face an estate tax when they pass. You may want to make the gift in trust or combine it with gifts to others.
    Answer Applies to: Oregon
    Replied: 11/22/2012
    CARL C SILVER ATTORNEY AT LAW
    CARL C SILVER ATTORNEY AT LAW | Carl C Silver
    Yes you will have to pay taxes as per the gift tax return you will need to file.
    Answer Applies to: Michigan
    Replied: 11/22/2012
    Gates' Law, PLLC | Thomas E. Gates
    Yes, you would be required to pay taxes. You can gift $13,500 per person each year (or whatever amount the tax code currently allows.
    Answer Applies to: Washington
    Replied: 11/20/2012
    Sebby Law Office
    Sebby Law Office | Jayne Sebby
    Yes, you will have to pay federal taxes on anything over $10,000 per person per year. State taxes will depend on the state you live in.
    Answer Applies to: Nebraska
    Replied: 11/20/2012
    Whiteford, Taylor, & Preston | Edwin Fee
    We do not yet know what the federal gift tax exemption will be in 2013, but it is likely to be at least $1,000,000. So you probably won't have to pay any gift tax. The gift tax exemption is $5,120,000 in 2012. So, if possible, you should consider making the gift before the end of the year. Also, your parents should arrange their estate planning so that the $1,000,000 doesn't come back to you in the event of their deaths, because this would waste the use of your gift tax exemption.
    Answer Applies to: Maryland
    Replied: 11/20/2012
    GOLD & ASSOCIATES, P.C.
    GOLD & ASSOCIATES, P.C. | KENNETH GOLD
    Probably not but you would need to file a gift tax return. Depends on what if any changes in the law are enacted for 2013. I suggest you talk to an estate planning and or tax attorney.
    Answer Applies to: Michigan
    Replied: 11/20/2012
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    You are advised to seek the services of a CPA to advise you, that specializes in federal tax of individuals, and what is required, to protect yourself and what your tax liability would be if any.
    Answer Applies to: California
    Replied: 11/20/2012
    Bullivant Houser Bailey PC
    Bullivant Houser Bailey PC | Darin Christensen
    No, but you will have to file a gift tax return (form 1041) to report the gift.
    Answer Applies to: Oregon
    Replied: 11/20/2012
    Charles M. Schiff, Attorney at Law
    Charles M. Schiff, Attorney at Law | Charles M. Schiff
    No one knows what the gift tax exemption will be in 2013. Most people anticipate that it will be at or above one million, in which case you could gift this amount without incurring a gift tax consequence. This is part of the "fiscal cliff" discussion.
    Answer Applies to: Minnesota
    Replied: 11/20/2012
    Frederick & Frederick PLC | James P Frederick
    No. You would need to REPORT this gift, by completing a gift tax return. If the law stays as it is, $1,000,000 would exhaust your lifetime exemption for gift and estate tax purposes. Whether or not this is a good idea is something you should discuss with an attorney.
    Answer Applies to: Michigan
    Replied: 11/20/2012
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    It is not possible to say at this time what the exemption from federal estate and gift taxes will be in 2013. The Congress must act on this; if Congress does not, then you would have only a million dollar exemption, and your gift to your parents would use it up no tax, but you'd have to file a gift tax return and show the application of your exemption. In general, it makes no sense to make gifts to the older generation; you just risk that money being taxed in their estates when they pass away. If you're thinking of a million-dollar gift, you should spend a few bucks on some estate planning, and see if there aren't better ways of achieving your goals.
    Answer Applies to: Oregon
    Replied: 11/20/2012
    Neal M. Rimer, Esquire
    Neal M. Rimer, Esquire | Neal M. Rimer
    You might not have to "pay" taxes on the gift but you will erode your unified credit. Giving a gift like this to a parent is usually not a good idea, if they then die and the money comes back to you, there could be a tax then too. Usually there are other alternatives that would work out better in helping your parents.
    Answer Applies to: California
    Replied: 11/20/2012
    Victor Varga | Victor Varga
    Yes, there will be gift tax implications.
    Answer Applies to: Maryland
    Replied: 11/20/2012
    THE BROOME LAW FIRM, LLC
    THE BROOME LAW FIRM, LLC | Barry D. Broome
    Gifting limits for 2012 is $5,300,000. In 2013 the gifting limit changes to $1,000,000. That is a total lifetime gift. You must file with the federal government a Form 709 disclosing the gift in the year that it is made.
    Answer Applies to: Georgia
    Replied: 11/20/2012
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Gift and estate tax are up in the air at this time, 2013 is uncertain at best. You should see an estate planning attorney ASAP as it may be your plans will be adversely impacted by the changes and you may wish to make some of your moves prior to the end of 2012..
    Answer Applies to: Michigan
    Replied: 11/20/2012
    Paul Nidich, Attorney at law
    Paul Nidich, Attorney at law | Paul Nidich
    If you are seriously considering giving your parents a million dollars, you need to see an estate planning attorney. Giving money to an older generation is generally an idea that needs to be discussed with a qualified professional and made a part of a multi-generational estate plan. The taxes are generally an insignificant consideration. By the way, the answer is no.
    Answer Applies to: Ohio
    Replied: 11/20/2012
    Edward L. Armstrong, P.C. | Edward L. Armstrong
    We are not sure what Congress will do with estate and gift taxes. If they do nothing, the exclusion from gift tax will be $1 Million. The first $13,000 to each parent would be excluded. There will, in all probability, be enough exclusion to shelter the gifts to them from tax. You must, however, file a Federal Gift Tax Return (Form 709) which will be due April 15, 2014 if you do make the gift in 2013.
    Answer Applies to: Missouri
    Replied: 11/20/2012
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    If you have not made taxable gifts previously, and you are a US citizen then you should have your entire $5.12 million dollar gift tax exemption available in 2012. That amount is probably going down to $1,000,000 in 2013. You should speak with an attorney or tax advisor to address the specifics. It would probably be much more advantageous to give the money this year instead of next. If you earned this money in 2012, you will still need to pay income taxes on the monies.
    Answer Applies to: Nevada
    Replied: 11/20/2012
    Martin Barnes - Attorney at Law
    Martin Barnes - Attorney at Law | Martin Barnes
    Good question. Generally, the donor is responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. You should work with your attorney or tax advisor in order to understand and minimize tax liability if you are considering this type of arrangement.
    Answer Applies to: Indiana
    Replied: 11/20/2012
    Law Office of Edward M. Burgh, APC | Edward M. Burgh
    If it is an unconditional gift and it is made this year you should not have to pay a tax on the gift. If it is made next year it is in doubt.
    Answer Applies to: California
    Replied: 11/20/2012
    O'Keefe Legal Services, L.L.C.
    O'Keefe Legal Services, L.L.C. | Sean P. O'Keefe
    In Maryland, there is presently no state gift tax, so you should not be taxed at the state level. On the federal level, many people expect the gift tax law to change in 2013, so it is unclear whether you will face federal gift tax consequences for gifts made in 2013. Presently, the federal gift tax law for 2013 should allow you to exclude one million dollars in gifts during your lifetime before being taxed at a 55% rate on gifts over that amount and not within the annual exclusion amount.
    Answer Applies to: Maryland
    Replied: 11/20/2012
    Neil J. Lehto, Esq.
    Neil J. Lehto, Esq. | Neil J. Lehto
    Anybody gifting $1 million should be seeking legal and tax advice from a qualified professional because the so-called "fiscal cliff" in the news since the Election could make drastic changes in federal law applicable to large gifts made this year or next. Federal gift taxes are due from the person making the gift. There are lifetime exemptions that may apply to most gifts under existing federal law that changes if the U.S. Congress and the President do not stop us from going over the "fiscal cliff." And it would change again next year if the U.S. Congress and the President agree on new tax laws next year as they likely would.
    Answer Applies to: Michigan
    Replied: 11/20/2012
    Ben T. Liu Law Office
    Ben T. Liu Law Office | Ben T. Liu
    Probably not; but the laws are in flux. The gift and estate tax tax laws may change in 2013. But you should see an attorney about an estate plan for you since you have substantial assets.
    Answer Applies to: Michigan
    Replied: 11/20/2012
    WARM SPRINGS LAW GROUP | Elliott D. Yug
    Talk with an accountant or tax attorney before doing anything. There are gift tax implications as well as estate tax implications.
    Answer Applies to: Nevada
    Replied: 11/20/2012
    Winnick Ruben Hoffnung Peabody & Mendel, LLC | Daniel N. Hoffnung
    This question requires an evaluation of your entire estate plan. You must consider what your plans are for your entire estate, and what tax exemptions you want to use now versus what you may need at death. If you are truly considering gifting that much money, you really need to consult with an estate planning specialist.
    Answer Applies to: Connecticut
    Replied: 11/20/2012
    Danville Law Group | Scott Jordan
    Probably not. However, you will have to file a gift tax return declaring the gift.
    Answer Applies to: California
    Replied: 11/20/2012
    TrustCounsel | Gregory Herman-Giddens
    If you make the gift in 2013, you will not owe any gift tax, but you will use up all of your gift and estate tax exemption (which is scheduled to be $1 million next year). That means at your death, the first dollar will be subject to estate tax. You will also be required to file a 2013 federal gift tax return.
    Answer Applies to: North Carolina
    Replied: 11/20/2012
    McCleary & Associates, PC
    McCleary & Associates, PC | David M. McCleary
    If you have a million $ to give away why are you asking for free tax/ legal advice on the internet? I suggest you go and hire an attorney or CPA.
    Answer Applies to: Michigan
    Replied: 11/20/2012
Click to View More Answers:
12 3 4 5 6 7 Free Legal QuestionsConnect with a local attorney