distributing inheritance

markgoyler · #1 (**permalink**) 03-27-2017, 10:20 PM

My wife is the sold beneficiary of her father's estate, mainly consisting of a mutual fund account. Her intention is to distribute this money to her siblings (there is no will or any other instructions from her father). For tax purposes, I would assume these distributions would be considered gifts, requiring her to observe the annual gift limitation of $14,000. Are we thinking correctly?

Wnhough · #2 (**permalink**) 03-28-2017, 12:25 AM

Quote:

Originally Posted by markgoyler

My wife is the sold beneficiary of her father's estate, mainly consisting of a mutual fund account. Her intention is to distribute this money to her siblings (there is no will or any other instructions from her father). For tax purposes, I would assume these distributions would be considered gifts, requiring her to observe the annual gift limitation of $14,000. Are we thinking correctly?

Correct; those distributions are gifts of your spouse ofr the donees; If you gave gifts to someone in 2016 totalling more than $14k (other than to your spouse), you need to file Form 709.

Wnhough · #3 (**permalink**) 03-28-2017, 12:28 AM

Quote:

Originally Posted by markgoyler

My wife is the sold beneficiary of her father's estate, mainly consisting of a mutual fund account. Her intention is to distribute this money to her siblings (there is no will or any other instructions from her father). For tax purposes, I would assume these distributions would be considered gifts, requiring her to observe the annual gift limitation of $28K. Are we thinking correctly?

however, Gift splitting allows a couple to donate a total of $26,000 before being taxed on the contribution