Is there a time period between receivinga gift and adeath regarding the payment of gift taxes?

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Is there a time period between receivinga gift and adeath regarding the payment of gift taxes?

I understand that my parents can “gift” me up to $12,000 each per year, tax free. Is there a time period between the date that I receive the gift and their death that I would have to pay a gift tax or could the money just be rolled back into their estate? My father seems to think that you have to live for 7 years after giving your child assets or inheritance/estate taxes have to be paid on it. And I guess I have the same question regarding federal taxes as well.

Asked on March 15, 2011 under Estate Planning, Alabama

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If I understand your question - and your Father's explanation - correctly then the answer is no, you can gift your children up to a certain amount each year (and that changes each year; last I looked it was $13,000 so double check it) and you do not have to live 7 years after the gifting or the kids have to pay taxes.  A gift is a gift when it is given.  As far as I know it does not have to be "rolled back in" to the estate of you do  not live 7 years after it is given.  You sound like you are doing some estate planning here.  I would suggest that you seek consultation from someone in your area who can look at what there is involved and let you know the best way to proceed.  Good luck to you.


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