My ex-boyfriend wired me money from his business account for a business that he owns to cover his portion of rent for the remainder of the year in the amount of $25,000 so that he could move out and I could remain in the apartment. He now says I owe him money since the gift limit is $14K. Is this true? What tax implications does it have on him the fact that he gave me $25K from his business account?
1 Answer from Attorneys
He is correct that the annual gift tax limit to a non-spouse is $14,000. The excess over this amount is applied first to his lifetime gift allowance, which is considerable, so no gift tax to him should be incurred, if he has not used up his lifetime exclusion. I would caution you that by issuing a business check he might be claiming that you received "compensation" from the business and claim what he gave you as a business deduction, which would then have to be reported by you as income. Gifts are not deductible by a business in excess of $25.00. Since it appears that there would be no gift tax responsibility, he should not be concerned that his payment exceeds the annual excludible amount.
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