Question

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?

Answer

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. 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:

  • Gift
  • Bequest
  • Devise
  • Inheritance

Related Topics

Related Resources

What Is State Income Tax Reciprocity?

Live in one state, but work in another? Review state income tax reciprocity rules with the team at H&R Block to learn how it may affect your taxes.

Taxable Military Income

Learn more about taxable military pay and get tax answers at H&R Block.

Investment App Taxes – Robinhood, Acorns & More

Learn more about the tax implications of investment apps like Robinhood, Acorns, Wealthfront & Stash with H&R Block. Accurately report all investment income

Retirement Income and Annuity Tax

Retiring soon? Learn more about retirement income tax including annuity taxes from the tax professionals at H&R Block.