Legal Question in Tax Law in Pennsylvania

You can give your children an unlimited amout of money without their having to pay any taxes. Gift tax is paid by the giver (you). If you give over $13,000.00 to any particular person in a calendar year, you will have to file a gift tax return with the IRS, but probably will not have to pay anything. If you give more than $1 million in your lifetime (though this law may change), you may have to pay gift tax.

So, you and your wife could each give each child $13,000, totalling $26,000 without having to alert the IRS. If you want to give to spouses as well (which I do not recommend because of potential divorce issues), you and your wife may give a child and his spouse up to $52,000 per calendar year without having to alert the IRS.