Re:John Carmack: I loaned money to anyone that asked me
by greyface- on Monday January 09, 2023 @09:34PM
(#34319696)
This is incorrect. Taxpayers are allowed to apply their lifetime gift exclusion before death. Line 7 on Part 2 of Form 709.
Re:John Carmack: I loaned money to anyone that asked me
by theonething on Tuesday January 10, 2023 @03:26AM
(#34321997)
I stand corrected. Thank you.
Re:John Carmack: I loaned money to anyone that asked me
by lotsofpulp on Monday January 09, 2023 @10:03PM
(#34319986)
A gift recipient does not owe tax, so taxpayer B never owes any tax for receiving a gift.
https://www.irs.gov/businesses/small-businesses-self-employe...
>Who pays the gift tax?
> The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.
Re:John Carmack: I loaned money to anyone that asked me
by theonething on Tuesday January 10, 2023 @03:26AM
(#34321995)
Ok, after a little more research, I think you're right and I stand corrected. Thank you for your patience!
If A is alive when that happens then that is wrong. B will be taxed on the amount of $1M - 17k because the gift tax applies not the estate tax.
If A were dead and gifted B in their will, then you would be correct because the estate tax applies in this scenario.
Again, since we're taking about loans and gifts while a person is alive in this thread, the first scenario of the gift tax applies.