Quote:
Originally Posted by retiredguy123
A lottery winner is taxed as income on the entire amount by the IRS. The receiver of gifted money is never taxed, regardless of the amount. A gift is not taxable income. There are estate taxes after death, but there are ways to avoid them by planned gifting while you are alive.
|
I stand partially corrected. Connecticut (the state I'm from) has gift tax combined with estate taxes. There are also gift taxes paid by the person giving the gift to someone else, and it exists to prevent people from avoiding paying taxes on their own income. Wealthy people have to submit a form to the IRS when they gift anyone over $18,000 (per recipient per year), and there's a lifetime maximum they can give. It seems pretty complicated, but if you're that wealthy that you can afford to do all that stuff, you probably have an accountant to handle it and/or explain how it all works.