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Can you gift money to family members and deduct the amount from your taxes?
Wiki User
∙ 9y ago
Assuming that you are referring to U.S. income taxes, the answer is absolutely not.
Not only are gifts to a person (as opposed to a tax-exempt charity) not deductible, you may even owe an additional "gift tax" on them. The gift tax is paid by the giver, not the recipient (it's not required to be reported as income by the recipient, either).
This applies even if you give the money to a charity but "earmark" it in some way for a particular individual. You can give your local church $50,000 "to help the needy" and that's deductible. If you give them $50,000 "to help Fred who just lost his home", though, it's not.
If you want to avoid estate taxes, the Annual Gift Exclusion can help there.
"The annual gift tax exclusion, the amount you can give to any individual each year without it being considered a taxable gift, is indexed for inflation, and the Internal Revenue Service has announced that in 2009 the amount will increase to $13,000 from the current $12,000. Thus a married couple will be able to give up to $26,000 to each of multiple recipients without incurring any federal gift tax."
Wiki User
∙ 9y ago
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