17 Feb Can I gift money for a house and deduct it on my tax return?

Q. If I gave my granddaughter money to buy her house, can I deduct that as a gift on my tax return?
— Gran

A. That’s a very generous gift.

But it’s not going to work out as you hope with your tax return.

Gifts are not deductible to the donor, nor are they income to the donee, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

For any gifts exceeding $17,000 per person — known as the annual exclusion amount — you must report it on Form 709, US Gift Tax Return, he said. While it must be reported federally, New Jersey does not have such a requirement, he said.

Also note that there is also a lifetime exclusion.

“Anything under the annual exclusion does not have to be reported if those are the only gifts,” he said. “For 2023, the lifetime exclusion is $12.92 million, which will increase in years 2024 and 2025, when the provisions in the current tax law sunset.”

We won’t know what will happen until Congress decides, he said.

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This story was originally published on Feb. 17, 2023.

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