| Do I owe any taxes when I receive a gift? |
| Fairly regularly, we are asked by client “Are gifts that someone gives me taxable ?” |
| We consider this a “tax iceburg” inquiry. The question is visible, but the complex nature of the difference between various types of taxes is hidden below the water. |
| There are many types of taxes, however many taxpayers are unsure of the difference between income taxes, and estate and gift taxes. If you receive taxable income, you may owe an “Income Tax” to the government, but if you receive a gift or inheritance from someone, and there is a gift or inheritance tax to pay, the donor is responsible for this liability. |
| Thus, from a tax point of view, we always prefer to receive a gift rather than incur taxable income !
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