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View Diary: Breaking: IRS to go HARD after American Crossroads/Priorities USA (240 comments)

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  •  From reading your post, I'm a bit confused... (0+ / 0-)

    I am not a tax lawyer, so please excuse my obvious ignorance, but are you saying that the donors are neglecting to pay tax or that the recipients are?  Donors have to pay tax to the IRS when giving a large gift?

    Wow, I feel foolish just asking this question.  Thank the divine that they don't ask this stuff on the bar exams I've taken ;p.

    "What Washington needs is adult supervision" - Barack Obama

    by auron renouille on Tue May 10, 2011 at 08:38:10 PM PDT

    •  Gift tax (0+ / 0-)

      is owed by the donor, not the recipient.  The opposite of income.  I'd love to know what rate it is taxed at, that I have no idea.

    •  Yep (0+ / 0-)

      The receipent doesn't have to report to the government that they recieved the money at all so it is completely tax free for them. Works out great for the less wealthy relations of the very rich, but even better for orginization who can collect unlimited amounts of money from unknow benefactors and never have to tell anybody about it.

    •  There are plenty of exceptions (0+ / 0-)

      so most people dont' have this issue.

      Each person can give up to $13k a year to each other person and some entities without the tax.

      Direct payments to medical providers and tuition don't count.

      And you have an exemption (which number has been changing over time but its a lot.. think millions) that you can use over your lifetime against the gift and estate tax on top of that.

      So most normal people making christmas and graduation gifts dont need to worry about the gift tax.

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