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Avoiding estate tax by giving multiple gifts

What are the US gift tax rules for gifts from non-US persons?US Income Tax and GiftsWhen does giving a gift “count” for tax year?Gifts under the annual gift tax exemption FROM minor children?Gift tax with family member gifting real estateAvoiding tax complexities of REITsGiving kids annual tax free gift of $28,000Do political campaign contributions count as gifts for tax purposes?Can yearly tax free gifts to a person in the U.S. be sent in multiple checks?Gift tax on gifts from multiple, unrelated individuals

5

From my understanding in the US, a father can give an individual gift of $15,000 to a child (or anyone) without any tax liabilities and without impacting the lifetime allowance. If the father wants to give more money, can he make a gift to a third party he trusts (e.g., his brother/uncle of his son) who then makes a gift to the child, or is that tax fraud?

united-states gift-tax estate-planning

share|improve this question

asked 2 hours ago

StrongBadStrongBad

710516

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  The rule of thumb on questions like this is, if you thought of this clever trick, there's good odds that someone else has already thought of it, and that it's been brought to the attention of the IRS at some point, and they are aware of it and know how to deal with people trying to be clever by doing this thing to screw them out of their tax revenue.
  
  – Mason Wheeler
  25 mins ago
  

  
  
  
  

add a comment | 

5

From my understanding in the US, a father can give an individual gift of $15,000 to a child (or anyone) without any tax liabilities and without impacting the lifetime allowance. If the father wants to give more money, can he make a gift to a third party he trusts (e.g., his brother/uncle of his son) who then makes a gift to the child, or is that tax fraud?

united-states gift-tax estate-planning

share|improve this question

asked 2 hours ago

StrongBadStrongBad

710516

• 
  
  
  

  
  

  
  
  
  
  
  

  
  
  The rule of thumb on questions like this is, if you thought of this clever trick, there's good odds that someone else has already thought of it, and that it's been brought to the attention of the IRS at some point, and they are aware of it and know how to deal with people trying to be clever by doing this thing to screw them out of their tax revenue.
  
  – Mason Wheeler
  25 mins ago
  

  
  
  
  

add a comment | 

From my understanding in the US, a father can give an individual gift of $15,000 to a child (or anyone) without any tax liabilities and without impacting the lifetime allowance. If the father wants to give more money, can he make a gift to a third party he trusts (e.g., his brother/uncle of his son) who then makes a gift to the child, or is that tax fraud?

united-states gift-tax estate-planning

share|improve this question

asked 2 hours ago

StrongBadStrongBad

710516

share|improve this question

asked 2 hours ago

StrongBadStrongBad

710516

share|improve this question

asked 2 hours ago

StrongBadStrongBad

710516

asked 2 hours ago

StrongBadStrongBad

710516

asked 2 hours ago

StrongBadStrongBad

710516

1 Answer
1

active

oldest

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9

If you give a gift with stings attached, then it isn't a gift. Thus it would be viewed as trying to get around the tax law. The law regarding this is the Step Transaction Doctrine.

But a spouse can also give a gift, and you can give a gift to your child's spouse. Thus a couple can give another couple 4x the limit each year.

If the child is in school then the giver can pay tuition directly and not worry about the limit. They can't send it to the student, they have to send it to the school.

Of course exceeding the limit in a year, does require paperwork, but the lifetime allowance is $11.4M as of 2019. Current tax law has this number adjust for inflation. If this is is something to worry about, consult a tax attorney to see how to do this legally.

share|improve this answer

edited 1 hour ago

JoeTaxpayer♦

146k23236473

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174

• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  
  Nice. The first sentence is key to so many gift questions...
  
  – TTT
  1 hour ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  There were a couple things I'd have posted, but 2 minor points don't make a full answer. If my edits are unwelcome, you can roll back. I won't take offense.
  
  – JoeTaxpayer♦
  1 hour ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  @JoeTaxpayer the step transaction stuff is perfect.
  
  – StrongBad
  1 hour ago
  

  
  
  
  

add a comment | 

protected by JoeTaxpayer♦ 52 mins ago

Thank you for your interest in this question.
Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).



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9

If you give a gift with stings attached, then it isn't a gift. Thus it would be viewed as trying to get around the tax law. The law regarding this is the Step Transaction Doctrine.

But a spouse can also give a gift, and you can give a gift to your child's spouse. Thus a couple can give another couple 4x the limit each year.

If the child is in school then the giver can pay tuition directly and not worry about the limit. They can't send it to the student, they have to send it to the school.

Of course exceeding the limit in a year, does require paperwork, but the lifetime allowance is $11.4M as of 2019. Current tax law has this number adjust for inflation. If this is is something to worry about, consult a tax attorney to see how to do this legally.

share|improve this answer

edited 1 hour ago

JoeTaxpayer♦

146k23236473

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174

• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  
  Nice. The first sentence is key to so many gift questions...
  
  – TTT
  1 hour ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  There were a couple things I'd have posted, but 2 minor points don't make a full answer. If my edits are unwelcome, you can roll back. I won't take offense.
  
  – JoeTaxpayer♦
  1 hour ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  @JoeTaxpayer the step transaction stuff is perfect.
  
  – StrongBad
  1 hour ago
  

  
  
  
  

add a comment | 

9

If you give a gift with stings attached, then it isn't a gift. Thus it would be viewed as trying to get around the tax law. The law regarding this is the Step Transaction Doctrine.

But a spouse can also give a gift, and you can give a gift to your child's spouse. Thus a couple can give another couple 4x the limit each year.

If the child is in school then the giver can pay tuition directly and not worry about the limit. They can't send it to the student, they have to send it to the school.

Of course exceeding the limit in a year, does require paperwork, but the lifetime allowance is $11.4M as of 2019. Current tax law has this number adjust for inflation. If this is is something to worry about, consult a tax attorney to see how to do this legally.

share|improve this answer

edited 1 hour ago

JoeTaxpayer♦

146k23236473

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174

• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  
  Nice. The first sentence is key to so many gift questions...
  
  – TTT
  1 hour ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  There were a couple things I'd have posted, but 2 minor points don't make a full answer. If my edits are unwelcome, you can roll back. I won't take offense.
  
  – JoeTaxpayer♦
  1 hour ago
  

  
  
  
  


• 
  
  
  

  
  1
  

  
  
  
  
  
  

  
  
  @JoeTaxpayer the step transaction stuff is perfect.
  
  – StrongBad
  1 hour ago
  

  
  
  
  

add a comment | 

If you give a gift with stings attached, then it isn't a gift. Thus it would be viewed as trying to get around the tax law. The law regarding this is the Step Transaction Doctrine.

But a spouse can also give a gift, and you can give a gift to your child's spouse. Thus a couple can give another couple 4x the limit each year.

If the child is in school then the giver can pay tuition directly and not worry about the limit. They can't send it to the student, they have to send it to the school.

Of course exceeding the limit in a year, does require paperwork, but the lifetime allowance is $11.4M as of 2019. Current tax law has this number adjust for inflation. If this is is something to worry about, consult a tax attorney to see how to do this legally.

share|improve this answer

edited 1 hour ago

JoeTaxpayer♦

146k23236473

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174

share|improve this answer

edited 1 hour ago

JoeTaxpayer♦

146k23236473

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174

edited 1 hour ago

JoeTaxpayer♦

146k23236473

edited 1 hour ago

JoeTaxpayer♦

146k23236473

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174

answered 2 hours ago

mhoran_psprepmhoran_psprep

69.3k896174