Gift tax, please advise.

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My mother gave me $50,000 and also wrote a gift letter ($50,000) to the bank assisting to apply mortgage for my apartment in April, 2017.


I felt bad to take my mom's money. After moving in the new apartment, I sold my car & I was able to return her with a check $36,000 two weeks ago.


My questions are as follow:
1. Will my mother still need to file & pay gift tax in 2017.
2. After receiving $36,000 from me, can it reverse the tax penalty?
2. My mother is married. What is her gift tax limit for this instance?


Please advise, thank you.

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I can’t say for 100% sure - but I doubt there would be any penalties. If she gave you the $50,000 in June of 2017 she just does a gift form when she does her 2017 taxes. If it was 2016 she needs to file an amendment and submit the gift form.

Like I said - unless your mother has gifted millions of dollars over the course of her life - she will not have to pay any taxes. But if she did have to pay, it would be the final tax return upon death.

However - do check to see if there are any state or county tax laws regarding gifts where you both live. It’s highly unlikely that there are - but just in case. The gift tax situation I’m referring to is for federal taxes - but that usually covers all bases. It would be unusual- as I said - that there would be a state or county gift tax. Unusual but not impossible.
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If my mother files a gift tax form now, will she have to pay gift tax now, next year or the end of her life? Since she gave me in June, will she have to pay penalty.
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P.S. - in your specific situation, your mother should have filed a gift tax form when she gave you the $50,000.

When you file your taxes for 2017 you should file a gift tax form for the $36,000 you gave your mother.
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In the vast majority of cases, gift tax is paid by the giver not the recipient. Even then it is normally paid at the end of life - the final tax filing done by the estate after death. Even then it is based on a lifetime of gift giving.

The last time I looked - about a year or so ago - the total amount gifted over the life time needed to be in the millions of dollars before paying a tax is required. 

Unless your financial contemporaries include Bill Gates and Warren Buffet- you are probably in the clear.

Still - the IRS likes gift givers giving over the annual lump sum of about $14,000 per person - to file a gift tax form. I guess they like to keep a running total - lol! Unfortunately, most accountants charge per form so if a professional tax accountant does the taxes of the gift giver - they’ll charge a bit more. Amounts gifted per person under the annual allowable sum does not need to be reported. 

However - laws may vary slightly from state to state so it’s probably a good idea to varify this information with you local tax guy or gal.
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