Tax gurus. I need advice.

tallfreak

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My wife and I are about to buy a house and my grandfather wants to give us a significant amount of money to help us get started. From what I have read online, if he doesn't give more than $13k in one year he will not have to pay gift taxes on it. My question is could he give me $13k and my wife $13k separately and avoid the taxes? I will be the only one on the mortgage, so I don't think I could use her money as down payment, but my portion of the money would be more than enough. We would like to use hers for appliances, furniture, and fixing the house if we could do it that way.

I don't think we will have to pay income taxes on the money, but I don't want him to have to pay. We currently live in Mississippi, but we are buying a home in Tennessee by the end of the year hopefully.
 

65fastback2+2

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How many annual exclusions are available?
The annual exclusion applies to gifts to each donee. In other words, if you give each of your children $11,000 in 2002-2005, $12,000 in 2006-2008, and $13,000 on or after January 1, 2009, the annual exclusion applies to each gift.


Frequently Asked Questions on Gift Taxes
 

tallfreak

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He would be giving it to us one time only this year? I am unsure whether he can give us up to $26k as a married couple tax free. Or give each of us up to $13k to total $26k tax free. Or since we are married he cannot give us more than $13k a year tax free.

I understand the annual exclusion, but I am not sure if that exclusion doubles for married couples.
 

Monster Mach

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short answer no.... if your married chances are your filing jointly. which makes it impossible to get 26k tax free.. there really are too many stipulations in your question.. it really does vary from state to state and tbh i havent seen anything like this in my books or in person. mainly for the fact he lives in a different state than you do.. in ny this wouldnt happen tax free but idk about down there
 

vertcobra99

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he can give you more then that if he wants. Just make sure that he wires the check at the closing to the mtg company. That way he can give you add much as he wants.
 

tallfreak

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short answer no.... if your married chances are your filing jointly. which makes it impossible to get 26k tax free.. there really are too many stipulations in your question.. it really does vary from state to state and tbh i havent seen anything like this in my books or in person. mainly for the fact he lives in a different state than you do.. in ny this wouldnt happen tax free but idk about down there

According to the IRS website the receivers will not have to pay taxes no matter how much the gift is. The giver is the only one to ever pay taxes on gift money.

I will see if I can find someone local that would know tax laws for my state. Thanks for the help.
 

Monster Mach

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According to the IRS website the receivers will not have to pay taxes no matter how much the gift is. The giver is the only one to ever pay taxes on gift money.

I will see if I can find someone local that would know tax laws for my state. Thanks for the help.

recievers never do pay taxes but the grandfather will be paying out the butt to help you out
 

ssssnake

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No. The exclusion is $13,000 a year to each of you. And, I believe, if he has a spouse, she can gift you $13,000 each tax free too. He won't have to pay tax on that, and you won't either. Enjoy.
 

JPD5801

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So, here is the quick and dirty on gifts:

He can give you each an amount up to the annual exclusion. It is currently $13,000. He can give you $13k and your wife $13k.

It doesn't matter what you use it for, as long as it is under the annual exclusion, it is tax free for all parties.

Your tax filing status doesn't change anything.

If you have any more questions let me know - I do this for a living.
 

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