Gift Tax??

[Yardley CPA]

MFJ Couple received $50,000 in 2018 from one set of parents.  Dad gifted $12,500 to each "child" and Mom gifted $12,500 to each.  The gift tax limit in 2018 is $15,000.  Based on these facts, I do not believe gift tax comes into play here.  Do you agree?

[Gail in Virginia]

I would agree.  But I am not an expert.

[DANRVAN]

agree

[Lion EA]

Agree, but only relevant if the parents doing the gifting are your clients. Or there are any international issues.

[Yardley CPA]

10 minutes ago, Lion EA said:

Agree, but only relevant if the parents doing the gifting are your clients. Or there are any international issues.

The parents who gifted are my clients as well.  Lion...would something need to be done for them given it's within the limit?

[Lion EA]

Each gift is less than the exclusion, so I say no. Unless only one parent gave, so you have to file to show gift splitting.

No gifts to foreign person or from, right?

[Yardley CPA]

4 minutes ago, Lion EA said:

Each gift is less than the exclusion, so I say no. Unless only one parent gave, so you have to file to show gift splitting.

No gifts to foreign person or from, right?

Thanks for your reply, each of the parents gave each of the kids.  No foreign person involved. 

[Lion EA]

I wouldn't file. But, I would make a note in each client's file. Who knows when a divorce might make one of the "kids" want the money from parents back and you'll need to remember that they were legal gifts!

[SaraEA]

No gift tax returns required.  If the parents apply for Title 19 within five years, the lawyer who handles the application will have to deal with the transfer of funds, not you.