General Gift Tax Rules
Currently, the federal tax code allows each person to give in a lifetime up to $5,000,0000 without paying gift taxes. However, for any gift to any one person that exceeds $13,000 in one year, the giver must file a report with the IRS disclosing the gift. The report must also be filed even if the donation is within the $5,000,000 exemption. Please note that it is the giver, not the recipient, that must file the reports and will be taxed if the gift exceeds the federal limit.
Investigations by the IRS
The IRS is using donations recorded in real estate records to identify givers that failed to file the disclosure reports. Although Louisiana real estate records were not among the initial slate of states the IRS is reviewing, these actions by the IRS illustrate how important it is to file the reports.
- Consult with your accountant to determine if you have a tax liability for donations above $13,000.
- File the IRS report disclosing donations.