Presently the IRS limit is $13,000.00 per person, per year. So, she may gift up to $13,000 per child if she wishes. However, this will have adverse effects if she later needs Medicaid (nursing home) assistance. You may wish to consult an elder law attorney in your area.
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I agree with the prior attorney. Note that what we are talking about as far as the $13,000 exclusion per donee per annum is gift tax. So she can gift to each of you this amount and not use up her lifetime $1,000,000 gift tax exclusion. From an income tax perspective, gifts are not taxable income so none of you need report this gift on your income tax return. Finally, note that this $13,000 is indexed for inflation, but the IRS has announced that for 2011 the amount remains at $13,000.
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Your mother can give a gift of $13,000 per child per year. If she is married she can do a split gift with her husband and double it to $$26,000. She also has a lifetime exclusion of $1 Million for gifts that exceed this amount.
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If your mother is married, your parents can each give $13,000 per child donee for a total of $26,000 per child. Given there is only $50,000 in the account, there may be less than the $13,000 limit to apply to each child if only your mother is making gifts.
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This is only an issue if your parents have more than 1,000,000 in assets at their death. If your parents are unlikely to have less than $1,000,000 at their death then they can give you as much as they want and not worry about any federal tax. I see so many people unnecessarily worry about this with "small" estates that are not going to be subject to tax. That said, there are other tax issues that should be considered--especially capital gains tax. If your parents give you an appreciated asset during their lifetime and you subsequently sell it you will have to pay capital gains tax, if however you inherit the same asset it will not be subject to capital gains tax is you sell it for what it was worth on the day your parent died.