16 Feb Do I owe taxes if someone gives me a gift?

Q. If a donor is not subject to gift tax for the first 16K of a gift, is the person who receives the gift responsible for any tax liability?
— Recipient

A. That would be a drag.

Imagine having to pay money on a gift! But don’t worry. It doesn’t work that way.

The person who receives a gift — the “donee” — is not subject to any gift or income tax on the gift, said Jason Marx, chair of the Tax & Estate Planning and Elder Law & Special Needs Planning groups at Curcio Mirzaian Sirot in Roseland.

“However, to the extent that the gifted asset appreciates in value or generates income — dividends or interest — then the donee would have to recognize gain on the sale of the appreciated asset or recognize income on the receipt of any dividend or interest income paid,” Marx said.

So enjoy your gift and don’t worry about any taxes.

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This story was originally published on Feb. 16, 2022.

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