Large monetary gift received in 2012

[rentorbuy]

Unexpectedly we received a $100k gift check for Christmas from a living relative. I about keeled over when I opened the envelope and saw what was inside.

The relative said this was to be deposited before the end of the year b/c of the no gift tax in 2012 -- hence we don't have to claim any of the money on our tax returns? I am excited and shocked.... can anyone relate in a similar experience in 2012? Is the no gift tax legit?

[Deleted]

If you would like to send it along to me (quickly), I'd be happy to relate a similar experience in 2012

[noodleoo]

Holy Crap! What are you going to do with it?

PS. No, I cannot relate.

[Ashley&Scott]

When gift tax applies the giver pays the tax, not the receiver.

www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Gift-Tax

ETA: Awesome gift, enjoy!

[limey]

Anyone can give you 13k annually without you having to pay taxes on it.

Estate taxes currently have a limit of just over 5M, though that is set to expire at the end of the year unless Congress extends the Bush era cuts.

www.nytimes.com/2012/11/09/giving/a-soon-to-end-gift-tax-break-spurs-a-flurry-of-activity.html?_r=0

[sillygoosegirl]

Dec 27, 2012 17:07:57 GMT -5 v said:

If you would like to send it along to me (quickly), I'd be happy to relate a similar experience in 2012

:Y:

[mrssavy42112]

That's all I have to say.

[sicilygirl]

The giver still needs to file a gift tax return. You will not owe any tax, and unless she has already given millions to others in the past, neither will she.

[cvillern]

We had a similar thing happen for us. Enjoy!

[heyrebekah]

Niiiiiiiiiice!

[cvillern]

Adding to that I am almost positive my parents filed gift tax paperwork. But you shouldn't have to do anything.

[LoveTrains]

Well since as others have said, the giftor pays the tax and not the giftee, go deposit and enjoy your gift!

[rentorbuy]

Yeah well I almost crapped my pants when I opened the envelope and I think I said "holy shit" a few times We were not expecting anything like this in a million years. My relative usually would give $500 or 1,000 but never any more at Christmas time. I had to count and recount the zeros on the check.

When we went to deposit it today the teller thought it was only $100 -- she had to re-do all the paperwork as she too did not count all the zeros.

The giver said this was being done due to the fiscal cliff and all that stuff that is unknown in the coming years and this was like an early inheritance for us while they are still living.

I have no idea what we will do with it. For now it will stay in savings until we decide what to do. Most likely will go towards a house. It is definitely life changing. I couldn't sleep last night after all the excitement. ;D

[Deleted]

Dec 27, 2012 17:43:19 GMT -5 rentorbuy said:

I have no idea what we will do with it. For now it will stay in savings until we decide what to do. Most likely will go towards a house. It is definitely life changing. I couldn't sleep last night after all the excitement. ;D

That's a nice, happy story.

[CloudBee]

Oh how exciting!

[whiskeytails]

I'm so jealous and happy for you! The relative is definitely taking advantage of the Lifetime gift exclusion as they should! It probably won't see $5mil in the next 4 years.

[bazealina]

I had a similar experience last year..The 5mil tax free gift is set to expire dec 31. Therefore, we recieved a nice check..I would invest 50% and put the other 50% toward an awesome house!!

[agnes]

Awesome! I'm so jealous. I wish I knew rich people.

Though, I'm waiting for ML to come in here saying something about you having 100k in your checking account. Tha HACKERSSSS!1!1111!!!!1

[KaraOrNot]

Very exciting!

[whitepicketfence]

Holy crap. Enjoy!

And, no, I can't relate LOL

[shell403b]

Holy shit.

Yeah, that's all I got. I think I'd faint dead away if that happened to me. OMG!

And uh, no, I cannot relate. I don't think many people in regular everyday life could, LOL.

[dexteroni]

Holy crap, congratulations!

My head would spin around like Steve Martin in The Jerk when he gets his first big check. lol.

[Deleted]

Dec 27, 2012 18:39:01 GMT -5 @sfgal530 said:

This all makes perfect sense. Right now, the personal estate/exemption tax is at $5M. Next year, it is slated to drop to $1M. By gifting now, your relative can give away up to $5M tax free, whereas next year s/he won't be able to give nearly that much.

If H and I had kids, we'd be doing the same thing now (though it only benefits if you plan to give away (or already have given away) more than $1M, because you don't get to give away like, $100K this year and then think your total is $1.1M lifetime next year; you have to exceed the amount set for next year, meaning you must give away more than $1M total to benefit).

ETA: Merry Christmas to you!

Mommy, is that you? Dad told me you had something for me...

[rentorbuy]

OK, the gift tax explanation makes more sense now. Many relatives unexpectedly received a gift check -- some even in the mail -- opening it thinking it was a regular Christmas card. My sister opened hers at work and about fainted when she realized what she was just gifted.