Gift Tax?

[jackd1959]

Hello Folks,

Does Canada have a gift tax?
If so, is there a limit on the amount an individual can gift that is not taxable?

EXAMPLE:
In the USA there is a tax on any gift from one individual to another that exceeds $11,000 USD.

I can gift each of my children $11,000 and so can my wife for a total gift of $22,000 per child, per year without my children having to pay a tax on the gift. Any gift amount in excess of that would be taxable.

I was wondering if Canada has a similar tax rule!

Thanks in advance!!!

PS: Sorry but I have all of the children I care to have but I could use a few girlfriends on the side!

 

[stang]

Might fall into some capital gains rule, similar to an inheritance?
Check out the government's revenue website.

 

[shakenbake]

Hello Folks,

Does Canada have a gift tax?
If so, is there a limit on the amount an individual can gift that is not taxable?

EXAMPLE:
In the USA there is a tax on any gift from one individual to another that exceeds $11,000 USD.

I can gift each of my children $11,000 and so can my wife for a total gift of $22,000 per child, per year without my children having to pay a tax on the gift. Any gift amount in excess of that would be taxable.

I was wondering if Canada has a similar tax rule!

Thanks in advance!!!

PS: Sorry but I have all of the children I care to have but I could use a few girlfriends on the side!

Visit the following link.

http://forums.canadianbusiness.com/thread.jspa?messageID=190194

There is no gift tax in Canada. If CRA deems it a payment for services rendered, then, yo re out of luck. Then again, are you claiming the payment of a gift to your kids? CRA doesn't have to know about it if it is a gift. However, do your kids live in the USA? If so, they would face a tax, if the value is above $12K.

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html

It is nice to be a Canadian

 

[themexi]

If you're worried give them cash. Tell them not to declare it & not to bank it, invest it or spend it indiscretely. If youre paronoid about cash then an offshore bnk account is handy. Seriously, do people actually jusr Volontarily Tell the government that they can now be economically raped harder???

 

[jackd1959]

Gift Tax question clarification!!

OK - so I'm still confused... in the USA you can legally gift ANYONE up to $11,000 USD per year without the individual having to declare it, or hide it.

So my direct question is this:

Can I gift a friend who lives in Canada (any friend) X amount of money without it being taxable to my friend. I don't want them getting nailed by the tax man but I also don't want them putting under their mattress.

In the USA, it is not an issue. My wife and I gift each of my children $22,000 a year and they don't get taxed on the gift. They will get taxed on the money earned from investing the gift properly.

GOD I HATE TAX LAW and I have a degree in accounting!!!

 

[jackd1959]

Visit the following link.

http://forums.canadianbusiness.com/thread.jspa?messageID=190194

There is no gift tax in Canada. If CRA deems it a payment for services rendered, then, yo re out of luck. Then again, are you claiming the payment of a gift to your kids? CRA doesn't have to know about it if it is a gift. However, do your kids live in the USA? If so, they would face a tax, if the value is above $12K.

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html

It is nice to be a Canadian

There is some mis-information in the forum link above. In the US I can give someone a gift of any amount and not be taxed on the gift I give, but the individual that I give the gift to, will be taxed on any amount that exceeds the allowable gift per individual.

 

[Aardvark154]

OK - so I'm still confused... in the USA you can legally gift ANYONE up to $11,000 USD per year without the individual having to declare it

Actually your $1,000 shy it's $12,000.

 

[jackd1959]

Like most tax situations, it's the actual interpretation/verification that counts. There is NO tax on gifts in Canada.

Now, if you're giving an escort $20K per year in "gifts", yet she has a commercial website (with prices listed), and she rents an apartment (which is not listed as her principle residence on her tax return)...then it's going to be pretty hard for her to stand in front of the tax department and claim the money's a "gift"! Right?

Moreover, it's going to be difficult for you to claim it's a "gift" to her when you don't even know her real name; her residential address; or her date of birth! (people usually don't give total strangers gifts, unless it's payment -- of some kind -- for services rendered).

Do you agree? Again -- no tax on gifts; but, the devil's in the interpretation/verification.

I agree... except I do know her real name, her real residential address, and her date of birth, as well as other personal information that a good friend would know. So you have answered my question to perfect satisfaction. I greatly appreciate the clarification.

PS:
I haven't verified this years gift allowance in the US tax code... I know it went from 10K to 11K but didn't see that it went up again... Thanks for the info to all who participated.