When gifting money to someone, person to person, once you go over the $14,000 threshold, how is the money taxed? I need to gift someone $25,000 but not if I'm going to be taxed some crazy number like 40% on the $11,000 over the $14,000 mark for one year. This isn't considered a loan to me, and instead of just doing it, I figured I'd ask questions first before it came back to bite me. Just wondering how this works.

Thanks,
Justin

When gifting money to someone, person to person, once you go over the $14,000 threshold, how is the money taxed? I need to gift someone $25,000 but not if I'm going to be taxed some crazy number like 40% on the $11,000 over the $14,000 mark for one year. This isn't considered a loan to me, and instead of just doing it, I figured I'd ask questions first before it came back to bite me. Just wondering how this works.==>No.you do not need to pay gift tax to the IRS UNLESS your gross gift amt given to someone is at least $5.45M; For the 2016 tax year, the estate tax exemption is $5.45 million .


BUT, you are married then,you a us gift splitting rule; For gift splitting to be official, both spouses must agree to the gift and specify the situation when filing taxes. In 2016, the gift tax exemption was set at $14K per individual gift annually. Gift splitting allows you and your spouse, a couple to donate a total of $28K before being taxed on the contribution.
For example, let's say you want to give someone $25K. If you make the gift alone, $11K ($25K-$14K) will be subject to gift taxes. So you must file form 709 to report the gift of $11K but as said abvoe you may not have to pay gift tax unless your gift mat is at least 45.45M; however,However, if you split the gift with your spouse, with each of you contributing $14K, both contributions , $28K exceeds $25K so no tax report is needed.

So basically I just have to report it and I won't have to pay taxes on it? I'm a single guy and won't ever reach into the millions. This is a one time gift.

correct; aslongas you are a done no;