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Monetary Gift Tax
June Said:Tax question: If I receive a monetary gift from a non-US citizen, do I have to file it on my US tax return?
We Answered:Gifts received by an individual are never taxable. You don't need to worry about the givers country of residence because you received a gift not income.
Harry Said:What is the maximum $ amount you can receive as a monetary gift without having to pay a gift tax?
We Answered:Gifts are not taxable income. But they may be reportable to the IRS. This is to prevent people from giving away all their assets before they die in order to avoid estate tax.
An individual may gift $12,000 to another individual in a tax year without having to file a gift tax return. More than that, and the giver has to file a Form 709. This does not imply that any gift taxes will be collected, though. Right now, the lifetime gift tax exclusion is $1,000,000 per person. In other words, no one has to pay gift tax until they've give a million dollars to another person. But they still have to file a gift tax return if they gift more than $12,000 in a single year to a person.
Patricia Said:If I should give a monetary gift of say $10,000, Is that amount tax deductable?
We Answered:Yes That amout is tax deductible there is a gift tax to the person who is giving the gift but it is small amount... You are allowed by tax law to give this amount but it must be declared by you the sender and the person who receives this gift. It goes on a special tax form just for this purpose of reporting this gift. Make sure this is done so you can get the credit on your tax form.