Q. Like many parents, we’re paying for our daughter’s wedding. Is this a taxable gift to our daughter and new son-in-law? S.B., Newport, RI
A. We would say no, although there isn’t any settled authority on this question. Technically, it would appear that the payments could constitute taxable gifts. The current annual gift tax exclusion covers gifts valued up to $14,000 per recipient per year. Therefore, to the extent that a gift by a married couple to a child and his or her new spouse exceeds a total of $56,000—$28,000 to both your daughter and son-in law—it appears you could conceivably be liable for gift tax. But the IRS hasn’t shown any inclination for pursuing this issue.
Tip: To be on the safe side, pay the expenses directly instead of giving a gift.
- Small Business Tax Deduction Strategies No matches