"John G Fidder CFP" <GFidderNOSPAM[at]Cinci.rr.com> wrote
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Some states do have an income tax on such gifts. The original poster should
check his/er state's income tax instructions for 2003 to get an idea.

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Not necessarily. If the unified credit has already been used, it is fully gift
taxable.

To be clear, there are NO income tax consequences when your grandmother
gives you money, regardless of the amount. The $11,000 limit is a gift tax
limit. Any gift to a single recipient in a single year that exceeds the
limit counts as a taxable gift. However, the "tax" is simply a reduced
unified credit.

So if your grandmother gives you $40,000 (I'll assume you are not married
and your grandfather has passed away), she is essentially giving you $29,000
above the limit. That $29,000 reduces the $1,500,000 she can leave to her
heirs without paying estate tax. Unless she's got $1,500,000 in assets and
life insurance, the "gift tax" is really a non-issue.

Of course, I'm not dealing with any of the changes in estate tax law,
proposed or in place.


"Steven" <Steven[at]Google.com> wrote in message
news:e5kVb.3276$Lp.1493[at]twister.nyc.rr.com...
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No, I don't think you need to pay any taxes.

However, your grandmom needs to give an extra concern while filing tax
return. I believe the exclusion limit for 2004 is $11,000 for each person.
She can transfer $11,000 to your grandfather and let him give you the
$11,000, and she give you $29,000 herself. This way raises the limit to
$22,000 and reduce the taxable portion to $18,000. The transfer between
spouses are not applicable

If you are married, she can give you $11,000 and your wife $11,000, and then
give the $1,8000 to your grandfather, and let him give you another $11,000
and your wife $7,000. This way they can file return on all $40,000.

I am not a tax professional in any way, so ask your grandmom to consult her
accoutant.





"wireless" <billpearson[at]roadrunner.nf.net> wrote in message
news:c03phq$mph$1[at]nntp-stjh-01-01.rogers.nf.net...
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my grandmother has offered me 40,000$ as a downpayment on my first house. if
i said yes to this offer, do i have to declare this as income? do i pay tax
on it?