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For the "Moneyist":
My husband and I plan to help our daughter with some of her wedding expenses. It’s my understanding an individual can give $19,000 in a year without triggering a taxable event. What is the best way to go about this? We don’t want to get into trouble. My plan is to contribute approximately $30,000.
The Mother of the Bride
From the "Moneyist":
I have good news and bad news; let’s start with the latter. Generally, yes, wedding gifts could be a taxable event, meaning you’d have to file a Form 709. But $30,000 is well within your annual/lifetime limit. The gift allowance is $38,000 annually for a couple, and $27.98 million for a couple ($13.99 million per individual) for a lifetime.
Your gift of $30,000, however, does not require a Form 709, given that it’s within the annual gift-tax exemption. Matt Boyd, an assistant director of high-net-worth tax planning at Northwestern Mutual, has recently written about this exact issue. “Receiving a cash gift from a loved one for your wedding can be a great way to start off married life,” he writes.
To go straight to the proverbial horse’s mouth, the IRS has very simple rules about what is not considered a gift that triggers a taxable event. “The general rule is that any gift is a taxable gift,” the IRS says. “However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts:
1. Gifts that are not more than the annual exclusion for the calendar year. 2. Tuition or medical expenses you pay for someone (the educational and medical exclusions). 3. Gifts to your spouse. 4. Gifts to a political organization for its use. 5. In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.”
More at the link.
Except perhaps for the "one-percenters" in this country, except for a bit of paperwork, the Federal estate tax is a non-concern. One needs to remember, the Federal estate tax rules were written by folks how are just slightly less rich than the "one-percenters."
