gifting with in family
If a client gifted 14k to a son and daughter in law (total 28k) and then the son and daughter in law gifted the money to his brother and wife (28k):
a. is this okay and no one has to file anything on their taxes?
or
b. this cannot be done within family?
Thank you,
Douglas
Permalink Submitted by Alan - IRA critic on Tue, 2013-05-14 19:08
This is considered a disallowed “step transaction” if the regifting is done any time soon after the intial gifts AND the client also gifted to the brother. If the client’s only gift is to the one son, and the son passes it on to the brother, that is OK because even if the IRS considered this a gift to the brother, it is within the limits allowed. In other words, the client cannot gift to the brother and also have a gift made to the other brother passed through since it would be viewed as a 28k gift instead of 14k.