My knowledge of tax laws is very basic, so I'm reaching out to the OG. The thread is in regards to the Gift Tax. Here's what I know:
- Each parent can give gifts totaling $14,000 to each offspring per year.
- The parent does not have to pay a tax for anything under this amount.
- This gift is not tax deductible.
- The parent does not have to fill out any special tax forms for providing a gift under $14K.
- The receiver does not have to claim this gift as income or fill out any special tax forms to receive this gift.
- Anything over $14K per year will be subject to a gift tax. So if parent provides child with $20K, the parent will have to pay a gift tax on $6K ($20-$14).
- Parent will have to file a tax document for anything over $14K.
- If parent provides $20K to the child, would the child claim $6K as personal income?
- Why would either party claim a gift transaction to the IRS, if the gift is not tax deductible? Is their only incentive a moral one?