How does received a $50k gift affect taxes?

[James Piercy]

Hello Everyone,

If my mother is to gift me $50k and I set up a payment plan to repay her, how does that work with taxes?  I had never heard of being taxed on a gift (silly me).  I was originally going to use the gift as a down payment but I learned that gifts can't be used to purchase property, until it becomes "seasoned".  I DO NOT want pay taxes on any kind of money that my mom gives. 

What I want to do is use my mutual funds to purchase a property and replenish the mutual fund with the 50k to make interest, while paying back my mom with no interest.

Does anyone have experience with gift taxing?  The last thing I ever want to do is pay the government twice.

Thank you.

[Brian Schmelzlen]

What you are describing is a loan. Repayment of loans are not taxable, but the interest (must charge at least AFR) would be taxable to your mother and deducted by you.

If it was a gift, it would not be taxable to you. Receipts of gifts are not taxable. They are taxable to the donor, but as was previously described there is a $14k annual exclusion to each donee, and a lifetime exclusion worth approximately $5.5 million and growing with inflation (may double in 2017 under the tax reform bill). Even though there is no gift tax, your mother would be required to file a gift tax return.