Is a gift from parent to adult children taxable children?

Generally, gifts from parents to adult children are not taxable to the children.

Here's why:

* Gift Tax Exclusion: The United States has a gift tax exclusion, which allows individuals to give away a certain amount of money each year without incurring any gift tax. As of 2023, this exclusion is $17,000 per person. This means you can give a gift of up to $17,000 to any number of people without it being taxed.

* Lifetime Exemption: There is also a lifetime exemption from gift tax. In 2023, this is $12.92 million. This means you can give away a total of $12.92 million during your lifetime without paying gift tax.

However, there are some exceptions to keep in mind:

* Gifts exceeding the exclusion: If the gift exceeds the annual gift tax exclusion of $17,000, the giver may have to file a gift tax return. Even then, no gift tax is due if the lifetime exemption hasn't been exceeded.

* Gifts for specific purposes: Gifts given for specific purposes, such as paying off debt or funding a business, may be considered taxable income to the recipient.

* Gifts given to minors: Gifts given to minors may be subject to the "kiddie tax," which taxes income earned by a child at the parent's tax rate.

It's always best to consult with a tax professional for personalized advice. They can help you determine if a particular gift is taxable and how to minimize your tax liability.

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