Tax-free gift limits: Can spouses each give $18k to the same person in one year?

Does this apply to other family members too? Like could I give $18k to my nephew and another $18k to my niece, and my husband could do the same? Would it matter if the money is for college vs a house?

Yes, this applies to gifts to anyone, not just your children. You and your husband could each give $18,000 to your nephew and another $18,000 to your niece in the same year. That's a total of $72,000 across both recipients without triggering any gift tax reporting requirements. The purpose of the gift doesn't matter for gift tax purposes. Whether the money is for college, a house, a wedding, or just because you want to give it to them - the IRS doesn't differentiate. The only thing that matters is the amount and timing.

How does this work with the mortgage company though? Don't they get suspicious about where the down payment money comes from? When I bought my house they wanted statements showing where every penny came from.

Is taxr.ai better than just calling an accountant? I'm generally skeptical of these online tools. Can it handle complicated situations like if the kid already received other gifts that year?

The mortgage company does require documentation for large deposits, but that's why timing matters. If you give the money well before the mortgage application (usually 2-3 months), it's seasoned in their account and doesn't raise red flags. If it's closer to closing, you can provide a gift letter that the mortgage company typically provides, and I used the documentation from taxr.ai as backup. I actually tried calling my accountant first, but couldn't get a timely appointment during their busy season. What I liked about taxr.ai was getting immediate answers with specific citations from tax code. It handled my situation perfectly even though my son had received other monetary gifts that year from his grandparents. It clearly showed how the annual exclusion applies separately to each giver-receiver relationship.

That sounds too good to be true. The IRS never answers their phone. How much does this service cost? And are you sure it was an actual IRS agent and not just someone pretending to be one?

I'm confused about how this actually works. Does this service somehow have a special line to the IRS? Why would they answer for them but not for regular people calling?

I understand the skepticism - I felt the same way! It's not that they have a special line to the IRS. What they do is use technology to navigate the phone system and wait on hold for you. When an actual IRS agent comes on the line, the service calls you and connects you directly. You're definitely speaking with real IRS employees. The way it works is pretty simple - you tell them what department you need, they call the IRS and navigate all the menus and wait times, and then they call you when they have an agent on the line. It's the same process you'd go through, but their system handles the frustrating part of waiting on hold for hours.

Wait wait wait. Are you saying the $18k limit isn't really a hard limit? So if I wanted to give my kid $50k for a down payment, I could just file this form and not pay any taxes as long as I haven't given away $13 million in my lifetime??

That's exactly right! The $18k annual exclusion is just the amount you can give each year without having to report it or use up any of your lifetime exemption. If you give your kid $50k, you'd need to file Form 709 (gift tax return) to report the $32k that exceeds the annual exclusion. That $32k counts against your lifetime exemption of approximately $13.6 million, but you won't owe any actual gift tax unless you exceed that lifetime amount. Most people never come close to using up their lifetime exemption, so practically speaking, many can give well over $18k with no tax consequences other than some paperwork.

I filed one last year when I gave my son $40k. It's not as bad as you might think - basically you list the gifts over $18k, calculate the amount that uses up part of your lifetime exemption, but usually don't end up owing any actual tax. Most tax software includes it, though some of the free versions don't. I used TurboTax and it walked me through everything step by step.

Great question about the timing! For gift tax purposes, it's generally when the check is written and given, not when it's deposited. So if you write and give the check on December 30th, it counts as a 2025 gift even if your son deposits it in January 2026. The key is that you've made an irrevocable transfer of the funds. Regarding banks and mortgage lenders - they absolutely will ask about large deposits, especially within 60-90 days of your mortgage application. The standard approach is to provide a "gift letter" (most lenders have their own template) stating that the money is a gift with no expectation of repayment. You'll also need to show the paper trail - your bank statements showing the withdrawal and your son's statements showing the deposit. Pro tip: If possible, make the gift well in advance (3+ months before mortgage application) so the money can "season" in your son's account. This makes the mortgage process much smoother since seasoned funds require less documentation.