Originally Posted by Wnhough
No howver your parents neeed to file form 709 with the IRS since the gifts?d be over $28K for joint. Everyone has a lifetime exemption from gift and estate tax of $5.45 million for 2016 and even after you use up your $14k annual exclusion and any other provisions that apply, any remaining gift amount applies against your lifetime exemption amount.
contributions to 529 plans are considered present interest gifts and qualify for the annualfederal gift tax exclusion. This means that you can contribute up to $15k(If married, you and your spouse together have $30k in annual exclusions for every beneficiary, a maximum $120k. in accelerated 529 contributions using the five-year election, ) per year, per beneficiary without incurring federal gift tax(The annual gift tax exclusion is adjusted annually for inflation and rounded to the nearest multiple $1k.) Note that the annual gift tax exclusion is per recipient. Grandparents can make gifts to each grandchild up to the annual gift tax exclusion amount. If you as a donor make contributions to your recipient that exceed the annual gift tax exclusion amount, including 5 year gift tax averaging, you will need to file a gift tax return, IRS Form 709.
Although your gifts over $15k in a year are taxable gifts, you may not actually write a check for the tax. you must use up your lifetime applicable exclusion amount before you'd be liable for an out-of-pocket payment for the gift tax.