I have a question about cash gift taxes and gift reporting. My spouse and I each received a cash gift totaling $32,000. How do we proceed with gift reporting on our return?
The gift tax is one of the most misunderstood of all taxes. As a general rule, the giver of the gift, and not the recipient or recipients owes this tax. So, regarding cash gift taxes and gift reporting, gift tax is generally not an issue for most people who are the recipients of gifts, even large monetary ones. The person who makes the gift files the gift tax return, if necessary, and pays any tax. Essentially, gifts are neither taxable nor deductible on your tax return. Also, a monetary gift has to be substantial for IRS purposes — In order for the giver of the sum to be subject to tax ramifications, the gift must be greater than the annual gift tax exclusion amount. The giver won’t pay any tax if the gift is at or below the annual gift tax exclusion — This amount is $14,000 for both 2014 and 2015. You don’t need to include the gifts that you and your spouse received as income. This is because gross income doesn’t include the value of property you get by:
If you are selling items at a farmer's market, learn how to file your taxes with H&R Block. From cash income to bartering, these tax tips will help.