If I wanted to give a relative 10K as a gift, is there any IRS nonsense that either one of us would have to go through? Iâve already done some searching and found that my relative will not have to report it as income, but on my side of the deal, all of the information Iâve found is tangled up nonsense that differs from my situation; like estate tax, inheritance, and grand children college funds - none of which applies to me. Any thoughts?
Claim it to be a "loan", you might be able to avoid the heft gift tax this way. Talk to a pro accountant, they know the tricks.
There is no "tangled up nonsense" and no "tricks" necessary, not at this low level. The annual exclusion is now $12,000 (and rising periodically) per recipient / per year. The bottom line is that you may give up to $12K to each of as many people as you want in a given year, tax-free for all, period. Nothing to file or report on your end or theirs. Even beyond that amount, there are exemptions, e.g., for education. See p. 6: IRS Pub. 950