What is the current maximum 1 time IRS allowable gift?? (like in Shawshank Redemption)?

Question

I think in Shawshank it was 50,000 tax deductible gift.

That took place a long time ago, so has it gone up since then?

Answer 1

Movies are not reality.

The limit for a gift that doesn't have to be reported on a gift tax return is $12,000 per calendar year given to any one recipient by any one giver.  There is a lifetime $1 million exemption where the giver doesn't have to pay a gift tax even though they might have to file a gift tax return.

Answer 2

If you gave any one person gifts in 2007 that are valued at more than $12,000, you must report the total gifts to the Internal Revenue Service and may have to pay tax on the gifts. The person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value.

Gifts include money and property, including the use of property without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift.



There are some exceptions to the tax rules on gifts. The following gifts generally are not taxable and do not count against the annual limit:



Tuition or Medical Expenses that you pay directly to an educational or medical institution for someone's benefit

Gifts to your Spouse

Gifts to a Political Organization for its use

Gifts to Charities



If you are married, both you and your spouse can give separate gifts of up to the annual limit of $12,000 to the same person without making a taxable gift.



Alternatively, with consent from your spouse, you can make a gift of up to $24,000

($12,000 x 2) to the same person without making a taxable gift. This is commonly known as splitting gifts between spouses. Essentially, it means a gift by you or your spouse to a third person can be considered as made one-half by each of you provided there is consent by both spouses.