Is it possible to avoid running down your Unified tax credit through the following arrangement?

A wants to gift $100k to B. Instead of gifting 100k to B, A gifts 10k to ten persons, who agree to gift the 10k he receives to B. Is this legal?

Asked on June 27, 2009 under Estate Planning, California

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Interesting.  Here is the deal: Gift tax limits are set so that someone can give let's say $10k per person (unlimited number of people). 

There is nothing wrong with gifting, however, the person who receives a certain amount may be subject to other taxes based on the high amount. 

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