WSJ: We’re Paying For Our Daughter’s Wedding. Is It A Taxable Gift?

Wall Street Journal, We’re Paying for Our Daughter’s Wedding. Is It a Taxable Gift?:

We answer readers’ questions about annual gift giving and taxes.

Q: My husband and I each plan to give our adult children $14,000 this year. My daughter may marry this year, and we would like to pay for much of the wedding. Could paying for the caterer or another wedding supplier count as a taxable gift if we pay the vendor directly?—a reader in Lexington, Ky.

A: You probably can pay for the wedding without fearing the taxmen. Paul Caron, a professor specializing in gift and estate taxes who is also dean of Pepperdine Caruso Law School, says, “In all my years in tax, I’ve never seen a case or ruling involving parents’ payments for a child’s wedding. So I wouldn’t feel I have to tell parents they owe gift tax on the cost of a wedding.”

He adds that often a wedding is more for the parents than the child, as in, “We’ve waited all this time…” However, he does advise parents to pay wedding bills directly to suppliers rather than giving money to the child for payments.

There’s more to gift taxes than weddings. Here are some other questions.

Q: I’m curious. If an NFL quarterback “gives” to each of the offensive line—the people who block opponents from sacking him—a $15,000 present, are the presents taxable to the linemen, and is the total $65,000 deductible to the QB?—a reader in Sebastian, Fla. ...

Q: If I give some of my stocks to a relative, I presume there is a step-up in basis. If they then sell the stock (assume it hasn’t appreciated) and give the proceeds back to me—all at amounts under the lifetime gift maximum allowed—will I owe any taxes?—a reader in Santa Clara, Calif. ...