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I inherited money last summer when my grandfather passed away. I gave $10,000 to my mother as a gift. Is this tax deductible?


Expert Donna Atkins's Answer:

 A gift is non-taxable to the receipient of the gift and therefore not deductible by giver of the gift.  If the amount given to any one individual during the calendar year exceeds $13,000 (2011 rules), there is a gift tax required to be paid by the giver (not the recipient) of the gift.  A gift tax form 709 is required if the gift exceeds $13,000 but may also be required for certain gifts of less than $13.000.  For example, a gift of real estate requires a form 709 even if the appraised value does not exceed the $13,000 limit.  There is an additional lifetime exemption of $5,000,000.  The lifetime exemption amount used is shown on form 709 and reduces the givers final estate tax exemption.  The estate and gift tax exemption amounts are aligned to prevent tax avoidance by large estates and to prevent tax avoidance by large gifts of assets prior to death.  

Donna Atkins, CPA

New Hampshire

21 yrs experience

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