What is the maximum amount of money that can be given to a minor child without eliciting the gift tax? I know this amount can be given yearly, so I am assuming I could do it now and then again in one month.
Looks like it’s 13,000 right now
And yes, this is per year. I don’t know if I’ve got all the details straight but it only triggers a gift tax return if the annual amount is over the limit - but even then you don’t owe a tax unless it exceeds a lifetime amount (like 1 million or thereabouts).
The fun thing is - from what I’ve heard - you and your spouse could each give the same minor 13,000 for a total of 26,000.
Yes, you could also give $26,000 to another married couple have them promise to give it to the child themselves. Repeat as much as you want until you run out of people. I don’t know if there is anything illegal about but there is nothing I can think of that would make it so. The catch would be that the whoever holds the money at any given time could keep it themselves if they wanted to.
I recently got some estate planning advice and can confirm what Mama Zappa says (previously I was unaware of the lifetime limit).
I believe the IRS would disallow it if the transfer is done strictly to avoid taxes (there’s kind of a catchall prohibition against creating transactions that are done only to avoid taxes but I am not conversant with the details), although if there is a very real risk that a recipient would keep the money instead of re-gifting it is probably legit.