Can my single father gift me $13,000 in 2009 as well as my husband $ 13,000 in 2009…?

…(we file jointly)
He doesn’t want to file the form 709 and pay any taxes on the money he gifts us. Basically, what is the amount he can give each of us without having to file anything with the IRS?

You can receive as many gifts as anyone would want to give you and you do not have to worry about the size of the gift. It is the person that is giving the gift that has to worry about exceeding the annual gift tax exclusion of $13,000. This gift tax exclusion does not apply to your husband. He can give you gifts of unlimited size with no tax consequence.

For example, you have two brothers, two sisters, four cousins, two uncles and two aunts, plus two neighbors that want to give you a gift. They can each give you $13,000. So in this case you can receive $182,000 ($13,000 X 14 = $182,000). Notice that even people not related to you can give you a gift. You do not have to report the gifts or pay tax on them. You just have to make sure the person giving you the gift does not have a retained interest. Meaning, they still own part of the gift.

The people giving the gift should keep track how much they are gifting, because gifts can reduce the value of the estate.

Now let’s suppose on of your brothers gives you $14,000 instead of $13,000. This is not a problem for you or your brother, except he exceeded the annual exclusion by $1,000. He needs to file form 709, but he will not owe any gift tax. He is allowed to give you $1,000,000 lifetime over the annual exclusion of $13,000 per year. So in this case, his $1,000,000 lifetime gift tax exclusion will be reduced to $999,000.

You should be careful not to confuse the gift tax exclusion with the estate tax exclusion. For 2009 the estate tax exclusion is $3,500,000. This exclusion is worth $800,900 in tax savings. For husband and wife there is something called the unlimited martial deduction. This means a husband or wife can leave as much as he or she has to the other without any estate tax due. It is the second death you have to worry about. So if the husband has $5,000,000 in his name and the wife has $3,000,000 in her name, and he dies, he can pass the $5,000,000 to her estate tax free. This get added to her estate of $3,000,000 so her estate is now worth $8,000,000. If they did it this way, the husband as lost the ability to use his $3,500,000 exclusion. There are ways to set up Marital bypass trusts to help reduce the estate tax.

I don’t want to go into all this information now, because it is outside the scope of your question. I just brought it up so you could see the difference between the gift tax exclusion and the estate tax exclusion. Here is a site that explains the how the gift tax works. http://www.smartmoney.com/personal-finance/taxes/when-to-file-gift-tax-forms-9555/

So your dad can give you $13,000 without filing any forms. Just make sure he keeps track of the gifts so they can be subtracted from the estate. We have no idea if the exclusion will be repealed in 2010. If it is the Sunset will take affect in 2011 and the exemption will drop from $3,500,000 to $1,000,000.