My dad refinanced his house was going to give me 30k out of the refinance do i or my dad have to pay taxes?

Berta
My dad refinanced his house & was going to give me 30k out of the refinance do I or my dad have to pay taxes? Is that a gift and has to be taxed or do I have to pay taxes on it; I thought noone has to pay taxes on it; any help thanks

Lavon
Your dad, not you, has to file a gift tax return. Remember, gift tax is paid by the one who gives the gift, not the recipient. In general, the first $13, 000 gift is tax free to the person who gifts. However, most people would not need to pay a dime on the gift because of IRS has set a huge amount of life time exclusion (i don't remember the exact amount, but it is like $2 to $3 million lifetime for each individual). To understand the concept better, think you have a cushion of $3million lifetime + $13K each year before your dad pays a dime of gift tax. However, you need to understand gift and estate taxes are connected. The $3million cushion also applies to your dad's estate...To simplify, say your dad has given you $1 million of gift during his life. When his estate is passed to you and say they are valued at $2.5million, then since your dad has already used $1 million out of the $3million and thus with $2 million exclusion left, your dad's estate will have to pay tax on the 500K excess (2.5 million estate - $2million exclusion left).In short, your dad probably does not have to pay any gift tax (unless he burned the entire exclusion already). However, keep in mind that he is eating into his exclusion every time he gifts more than $13K to each individual in any given year...

Darlene
You are entitled to an annual non-taxable amount of gift income. The annual exclusion was $12, 000 in 2006-2008, and $13, 000 on or after January 1, 2009. So, your dad can refinance his house and give you a non-taxable gift of 13, 000 in December 2009 and another 13, 000 in January 2010. Anything above the annual exclusion would need to be claimed by your dad on his taxes. Are you or your dad married? These exclusions apply to individuals, so if your dad is married he and his wife can give you a non-taxable gift of 26, 000. (13, 000 each) Also, if you are married you can get an additional 13, 000 for your spouce as well. In this way if you and your dad are both married you could actually get up to 52, 000 in non-taxable gift income in 1 year.

Kyoko
You don't need to pay any taxes. A gift is never taxable to the recipient.Your dad may have to pay taxes, however. He's allowed to give you up to $13, 000 per year tax-free. There are ways to avoid having to pay that tax, however. For example, if your mom is still around, he could give you $13, 000 and she could give you $13, 000. If you're married, they could each give $13, 000 to you and $13, 000 to your wife. He could give you some of the money this year, and some next year.Here's the official IRS FAQ about the gift tax: http://www.irs.gov/businesses/small/arti…

Ernest
Your dad can give you 13, 000 and so can your mom, HOWEVER, he can have you sign a promissory note for the rest of the money (17, 000) at a 0% interest rate. On Jan 1, 2010, he makes a notation on the promisorry note that he has forgiven 13, 000 and you owe 4, 000. On 1/1/11, he forgives the remaining 4, 000. Get original promissory note notarized.

Tera
You don't pay tax for getting the $30K, and he can't deduct it, but your dad will have to file a gift tax return - he probably won't owe a gift tax on it though, the amount will just come out of his exemption for his estate.

Demetra
It is a gift and HE will have to file a gift tax return.

Gerda
You will have to pay taxes. A good easy rule to use, is that if money changes hands (officially/legally) its taxed. Anything over 10k is automatically reported to the IRS.Smartest thing you could do is put it in a tax shelter like and Roth IRA an just let it sit if you can do it. Once you spend it, its gone forever ;)

Brigid
YOU must pay a gift tax on the amount in excess of $13, 000. There is ONLY no gift tax on gifts under $13, 000.