[AL] What are the tax consequences of gifting $47,000 in coins and how do I protect my other daughter’s inheritance?

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Legal Eagle

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You can gift your daughter $47,000 in coins without her paying tax on it. The gift may require you to file a gift tax return, but no tax is due right now. To protect your other daughter, you should update your will or trust so the daughter receiving the coins cannot later claim more.

Long answer:

The gift itself is not taxable income to your daughter.
Because the amount exceeds the annual exclusion ($18,000 per person in 2025), you must file IRS Form 709.
Filing Form 709 does not mean you owe gift tax unless you’ve exceeded your lifetime exemption.
Your daughter receives your original cost basis in the coins, which matters only if she later sells them.

To protect your second daughter’s inheritance:

Amend your will or trust to state the $47,000 gift is an advance on inheritance.
Deduct that amount from the first daughter’s share at your death.
Consider having the first daughter sign an acknowledgment confirming she received her share and won’t seek more later.

Full Conversation

What are the tax consequences if I gift my daughter with $47,000 in coins now?

Lexi, Chatbot

I understand that gifting a significant amount can be concerning. Can you tell me if this is a one-time gift or part of a series of gifts you plan to make?

One time, in lieu of her inheritance.

Lexi, Chatbot

Are there any specific tax-related concerns or circumstances that you think might be relevant to this gift?

I don’t know.

Lexi, Chatbot

Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with your gift tax concerns.

Is there a way to protect my 2nd daughter’s inheritance?

Legal Eagle

Hello! Legal Eagle here, and I am an attorney specializing in this area of law. I’m happy to help. Have you already created a will or trust outlining how both daughters will receive their shares of your estate?

Yes, and I need to change it.

One daughter basically wants her share now instead of when I die. I don’t care if we do it this way. I just need to make sure there are no tax consequences and that she cannot come back and ask for more later.

Legal Eagle

Got it, thanks for letting me know. First, could you tell me which state you’re located in? This can affect how we approach changes to your will or trust.

Alabama right now. I’m contemplating a move to Arkansas in the future.

Legal Eagle

Thanks for sharing that. Since you’re in Alabama, we’ll focus on Alabama law for now. Have you already consulted with a tax advisor or attorney about the potential tax implications of gifting this amount?

No.

Legal Eagle

Okay. Is there anything else you’d like me to know before I answer your question?

The daughter who wants the coins lives in California, if that makes any difference.

Legal Eagle

Long answer:

The gift itself is not taxable income to your daughter.
Because the amount exceeds the annual exclusion ($18,000 per person in 2025), you must file IRS Form 709.
Filing Form 709 does not mean you owe gift tax unless you’ve exceeded your lifetime exemption.
Your daughter receives your original cost basis in the coins, which matters only if she later sells them.

To protect your second daughter’s inheritance:

Amend your will or trust to state the $47,000 gift is an advance on inheritance.
Deduct that amount from the first daughter’s share at your death.
Consider having the first daughter sign an acknowledgment confirming she received her share and won’t seek more later.

So if I file Form 709, there will be NO tax consequences for me or my estate?

Legal Eagle

Correct. Filing Form 709 does not trigger tax. It only reports the gift and reduces your lifetime exemption, which is very high. Your estate is not penalized simply for reporting this gift.

Okay… thank you!!

Legal Eagle

You’re very welcome! Did I thoroughly address your question? If there’s anything else you need, please let me know.

I think this was pretty clear. I want to sell this house and buy another for my second daughter—I think I already have the answers to that. Again, thanks for your help.

Legal Eagle

Thank you so much for contacting us! We’re happy to help whenever you need it.

Legal Eagle

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