Giving kids annual tax free gift of $28,000
Why limit yourself to $28K per year?  If you pay the tuition directly to the institution, it does not count against your annual or lifetime gift-giving totals.  You could pay the entire tuition each year with no tax consequences. The only thing you can't do if you want to go this route is give the money to your children; that's what causes the gift tax to kick in.  The money must be paid directly to the school. "From the IRS' website:  How many annual exclusions are available? The annual exclusion applies to gifts to each donee. In other words,   if you give each of your children $11,000 in 2002-2005, $12,000 in   2006-2008, $13,000 in 2009-2012 and $14,000 on or after January 1,   2013, the annual exclusion applies to each gift. The annual exclusion   for 2014, 2015, and 2016 is $14,000. What if my spouse and I want to give away property that we own together? You are each entitled to the annual exclusion amount on the gift.   Together, you can give $22,000 to each donee (2002-2005) or $24,000   (2006-2008), $26,000 (2009-2012) and $28,000 on or after January 1,   2013 (including 2014, 2015, and 2016). https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes Basically, this means that it doesn't matter which person it specifically comes from as it's a ""joint"" gift.  There is more complicated paperwork to fill out if the gift comes from a single check and needs to be ""split"" for taxes. Each parent would need to fill out a separate gift tax return form, essentially proving that both parents approve of the gift. It seems like it's easier if each parent writes a separate check, however it's not a requirement." If the child is a dependent the question is moot. It is accepted that the parent will pay for some, most, or all of the tuition. There is no tax issue for a current student. The payment of tuition helps them qualify as a dependent. There is no need to transfer the money to the child's account; it can be sent directly to the school. If the money is to be used in the future there are accounts such as 529s pre-paid accounts, and Coverdell savings accounts that can be used. All have pluses and minuses, all can impact taxes, and all can impact financial aid calculations.
No, any gifts you receive are not taxable to you. In fact, losing money in a scam (as this sure sounds like to me) can even be tax-deductible if you lose enough! I wouldn't recommend accepting anything. Usually people with millions are dollars are capable of setting up their own bank accounts. I used TurboTax last year. It had a section for donations where it figured out the amounts of the IRS approved values for a donation.  You would need to know the size of the television and the current condition it is in.  He's a screenshot - though it's not from the TV section.  https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Video--How-to-Estimate-the-Value-of-Clothing-for-IRS-Deductions/INF13870.html+&cd=8&hl=en&ct=clnk&gl=us TurboTax offers a free online tool called ItsDeductible that does the same thing (though I haven't tried it). Unfortunately, I don't have the current one with TV's to give you the range of amounts that apply to yours. --I am not affiliated with TurboTax and did not receive it for free for a review. There is not any fraud involved. Anybody can gift money to another person. Look into the Coverdell Education Savings Account (ESA). This is like a Roth IRA for higher education expenses.   Withdrawals are tax free when used for qualified expenses. Contributions are capped at $2000/year per beneficiary (not per account) so it works well for young kids, and not so well for kids about to go to College. This program (like all tax law) are prone to changes due to action (or inaction) in the US Congress.  Currently, some of the benefits are set to sunset in 2010 though they are expected to be renewed in some form by Congress this year. "Can I teach children an invaluable skill for free and provide a website or PayPal link for anyone who appreciates the result of my gift to their child and wishes to gift me money (or maybe they don’t have a child but believe in my revolutionary contribution to the future) as they see fit, up to $10K? Two immediately obvious problems with this strategy: What about when you receive gifts from people who aren't in the US? You have to declare, and pay taxes on, foreign gifts. It seems to me that these may not be gifts because they are given in connection with the service you provided rather than from ""detached and disinterested generosity"" as required to make the gift tax exempt. (See Commisioner v. Duberstein -- gift given to thank associate for a sales lead did not arise from detached generosity. See Stanton v. United States -- gift given in appreciation of services rendered may or may not be a gift for tax purposes. See also Bogardus v. Commissioner -- gifts inspired by past service can be tax exempt.)" It is correct, in general. Gift tax is indeed at 35%, but you have the first 14K of your gift exempt from it for each person you give to, yearly (verify the number, it changes every year). You can also use your lifetime exemption ($5.45M in 2016, subject to change each year), but at the amounts you're talking about it still will not be enough. Charitable (501(c)) organizations, paying for someone's tuition or medical expenses (directly to the providers), political donations, transfer between you and your spouse - these are all exempt from gift tax. If you have 10 millions to give, I'm sure you can afford a $200 consultation with a EA/CPA licensed in your state. When you apply for the mortgage expect that the lender will want your sister to sign a form explaining that that is a gift, otherwise the lender might be concerned that it is a loan. Be careful about the gifting of the money to a minor. You could run into an issue if the money isn't spent on something that benefits the child. The IRS does get concerned about using money transfers between child and parent to get around tax issues. Other than that you don't have a tax issue. If the gifting is done correctly your sister can gift $14,000 to you and your spouse each year. If your child has a large expenses in the near future: tuition, braces... Your sister could transfer funds to the child to pay for those items, thus freeing up some of your funds for the house. As much as you want. There's no tax on gifts you receive. Gift tax is on the donor, i.e.: the person giving the gift. The $100K limit is for reporting. Gifts of $100K or more per year from foreign sources must be disclosed on form 3520 attached to your tax return. But there's no tax. Read more here. Canada doesn't seem to have a gift tax. http://www.taxtips.ca/personaltax/giftsandinheritances.htm Of course, you've already realized that some of that is that smaller estates are more common than larger estates.  But it seems unlikely that there are four times as many estates between $10 and $11 million as above that range.   People who expect to die with an estate subject to inheritance tax tend to prepare.   I don't know how common it is, but if the surviving member of a couple remarries, then the new spouse gets a separate exemption.  And of course spouses inherit from spouses without tax.  In theory this could last indefinitely.  In practice, it is less likely.  But if a married couple has $20 million, the first spouse could leave $15 million to the second and $5 million to other heirs.  The second spouse could leave $10 million to a third spouse (after remarrying) and another $5 million to children with the first spouse.  All without triggering the estate tax.   People can put some of their estate into a trust.  This can allow the heirs to continue to control the money while not paying inheritance tax.  Supposedly Ford (of Ford Motor Company) took that route.   Another common strategy is to give the maximum without gift tax each year.  That's at least $14k per donor and recipient per year.  So a married couple with two kids can transfer $56k per year.  Plus $56k for the kids' spouses.  And if there are four grandchildren, that's another $112k.  Great-grandchildren count too.  That's more than a million every five years.  So given ten years to prepare, parents can transfer $2 million out of the estate and to the heirs without tax.   Consider the case of two wealthy siblings.  They've each maxed out their gifts to their own heirs.  So they agree to max out their gifts to their sibling's heirs.  This effectively doubles the transfer amount without tax implication.   Also realize that they can pretransfer assets at the current market rate.  So if a rich person has an asset that is currently undervalued, it may make sense to transfer it immediately as a gift.  This will use up some of the estate exemption.  But if you're going to transfer the asset eventually, you might as well do so when the value is optimal for your purpose.   These are just the easy things to do.  If someone wants, they can do more complicated things that make it harder for the IRS to track value.   For example, the Bezos family invested in Amazon.com when Jeff Bezos was starting it.  As a result, his company could survive capital losses that another company might not.  The effect of this was to make him fabulously rich and his parents richer than they were.  But he won't pay inheritance tax until his parents actually transfer the estate to him (and I believe they actually put it in a charitable trust).  If his company had failed instead, he still would have been supported by the capital provided by his parents while it was open (e.g. his salary).  But he wouldn't have paid inheritance tax on it.   There are other examples of the same pattern:  Fred Smith of FedEx; Donald Trump; Bill Gates of Microsoft; etc.  The prime value of the estate was not in its transfer, but in working together while alive or through a family trust.  The child's company became much more valuable as a result of a parent's wealth.  And in two of those examples, the child was so successful that the parent became richer as a result.  So the parent's estate does count.  Meanwhile, another company might fail, leaving the estate below the threshold despite a great deal of parental support.   And those aren't even fiddles.  Those children started real companies and offered their parents real investment opportunities.  A family that wants to do so can do a lot more with arrangements.  Of course, the IRS may be looking for some of them.   The point being that the estate might be more than $11 million earlier, but the parents can find ways to reduce it below the inheritance tax exemption by the time that they die. The $250K and up are not one homogeneous group. The lower end of this group benefits from normal Schedule A itemized deductions, e.g. mortgage interest, property tax, state income tax, and charitable donations. As you mention, 401(k) ($17k employee contribution limit this year), but also things like the dependent care account ($5k limit) and flexible spending account, limited usually up to $2500 in '14. The 529 deposits are limited to the gifting limit, $14K in 2014, but one can gift up to five years' deposits up front. This isn't a tax deduction, but does pull money out of one's estate and lets it grow tax free similar to a Roth IRA. The savings from such accounts is probably in the $15k - $20K range given the 20 or so year lifetime of the account and limited deposits. At the higher end, the folks making the news are those whose income is all considered capital gains. This applies both to hedge fund managers as well as CEOs whose compensation included large blocks of stock. This isn't a tax deduction, but it's how our system works, the taxation of capital gains vs. ordinary income. "Donations, particularly those in the context of you providing a free service (software, libraries, etc.) are a notable grey area in tax code. Simply naming a button ""Donate"" doesn't necessarily classify the money transfer as a ""gift"". The IRS can decide that it's money you're being paid to continue your excellent work/service, making it taxable income (unless you're a registered non-profit organization). In the instance of Patreon, and many other crowd-funding services, you're providing a certain level of ""service"" for each tier of donations (such as early access or something, I'm not sure what you're offering), which means they're receiving consideration for their donations, which most likely makes it fall into taxable income (again, unless you're a registered non-profit organization). State tax law is even more convoluted, and you should consult your tax professional for clarification on your specific situation." Generally, a one time thing is considered a gift. For the donor this is obviously not a deductible expense, except for some specific cases (for example promotional gifts under $25 to vendors can be deducted, if you're a business, or charitable contributions to a recognized charity). However, if this is a regular practice - that would not be considered as a gift, but rather as a tax fraud, a criminal offense. Being attentive I would like to make a little gift or give some little   (<100$) amount of money (cash/wire/online) for that Why? Generally, gift is exempt from income if no services were provided and the gift was made in good faith. In the situation you describe this doesn't hold. When the gift is exempt from income to the receiver - the donor pays the tax (in this case, below exemption the tax is zero). If the gift is not exempt from income to the receiver - it is no longer a gift and the receiver is paying income taxes, not the donor. The situation you describe is a classic tax evasion scheme. If someone does it consistently and regularly (as a receiver, donor, or both) - he would likely end up in jail. Here's an excerpt from the Charles Schwab website which I think will help evaluate your position: The simple answer to your question is no, the value of a gift of stock   for gift tax liability is NOT the donor's cost basis, but rather the   fair market value of the stock at the time the gift is given. So let's   say you purchased 100 shares of XYZ stock at $50 a share. Your cost   basis is $5,000. Now the stock is $80 a share and you give it as a   gift. The value of your gift for gift tax purposes is $8,000. In 2015, you can give up to $14,000 to an unlimited number of   individuals each year without paying a gift tax or even reporting the   gifts. If you give over that amount to any individual, however, you   must report the gift on your tax return, but you don't have to pay   taxes until you give away more than the current lifetime limit of   $5,430,000—for the amount above and beyond $14,000 per person per   year. So in the example above, there would be no gift tax liability.   However, if the stock happened to be $150 a share, the value of the   gift would be $15,000. You'd then have to report it and $1,000 would   be applied toward your $5,430,000 lifetime exclusion. You will need to pay a gift tax on the current value of the stock. I'm not familiar with the tax laws in India, but if your brother was in the US, he wouldn't pay taxes on that gift until he sells the stock. The recipient doesn’t have to worry about gift taxes. It's when the   recipient decides to sell the stock that the issue of valuation comes   up—for income taxes. And this is where things can get a bit more   complicated. In general, when valuing a gift of stock for capital gains tax   liability, it's the donor's cost basis and holding period that rules.   As an example, let's say you receive a gift of stock from your   grandfather. He bought it for $10 a share and it's worth $15 a share   on the day you receive it. If you then sell the stock, whether for a   gain or a loss, your cost basis will be the same as your   grandfather’s: $10 per share. Sell it at $25 and you'll pay tax (at   the short- or long-term rate, depending on how long he owned the   stock) on a gain of $15 a share; sell it at $8 and your capital loss   will be $2 a share. Ultimately, with a gift this large that also crosses international borders, you really should hire a professional who is experienced with these types of transactions. Their fees/commission will be completely offset by the savings in risk and paperwork.  http://www.schwab.com/public/schwab/nn/articles/How-Do-You-Value-a-Gift-of-Stock-It-Depends-on-Whether-You-re-the-Giver-or-the-Receiver There are no US taxes for receiving a gift (you). There may be US taxes for giving a gift (the gift tax), for your parents, but if they are nonresidents and the money they are giving was not situated in the US, then they do not have US gift tax. You have to report a gift from a foreign person if it exceeds $100,000.