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<< My husband and I will be the receivers of a gift from a friend. He will be giving us $25,000. How is the best way to handle this situation for all parties? >>

The gift tax aspect has already been covered. I'll just emphasize that gift tax is the responsibility of the donor, not the recipient.

Noncharitable gifts are not deductible for the donor. Gifts are never taxable income to the recipient.

If the friend gives you stock, you also receive his basis and holding period. It's tacky, but make sure you get that information from him. You'll need it down the road, unless you hold the stock until you die.

Phil Marti
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