Tax Experts, Gift Tax?

Am I understanding that if you make money during a year and you decide to GIVE your children or anyone else a GIFT of money or property, that you can only give up to $16K. If you give more than that YOU have to pay a GIFT TAX.

Is it not just beyond belief that the IRS will tax you on any gift over that amount. So you pay taxes on your income and then if you want to give it away, you have to pay taxes on it again. Unfreakin believable.

https://smartasset.com/retirement/gift-tax-limits

You can double that if your wife also gives the limit.

I think the first 12MM or so that you “gift” is exempt.

Keep reading on that link,

"So let’s say that in 2021 you gift $216,000 to your friend. This gift is $200,000 over the annual gift exclusion. That means you will need to report it to the IRS. However, you won’t immediately have to pay tax on that gift. Instead, the IRS deducts that $200,000 from your lifetime gift tax exemption. Assuming you have never made any other gifts over the annual exemption, your remaining lifetime exemption is now $11.86 million ($12.06 million minus $200,000). "

over 16k you have to report , not pay taxes,


MO

That's a lifetime total exemption. You get maxxed out at $16k (for 2022) per recipient per year.

Yes, thank you. I just read that.

This

Write it up as rent

Like was mentioned above, just because you go over doesn't necessarily mean you'll be writing any checks to the IRS, but you'll have to file a gift tax return if you go over.

You and your wife can also double that amount if the child you are giving to is married by maxing out the gift to each of them, so $64k in a year while still staying under the limit and avoiding having to file a form 709.

Got it, Thanks MO!

Thanks again!

Just don't report it.

Send me 15k if you have extra laying around
I won’t say a word

Well Ok then.

The check is in the mail.

$16k a year to everyone and anyone you want to AND NOT REPORT IT ON YOUR TAX FILING.

You also have about $11 million lifetime exemption that you have to report, double if married.

Got it.

No to the highlighted red part. Can explain in more detail later. Brain full right now.

*edit* nevermind, someone else explained the lifetime exclusion just fine.