#AskTheTaxWhiz: Are wedding gifts taxable?
I’m getting married! Are my wedding gifts taxable?
Congratulations! But yes, wedding gifts from your guests are subject to 30% donor’s tax. However, there are few exemptions:
- Dowries or wedding gifts not more than P10,000 worth from your parents are deductible from the gross gifts subject to donor's tax;
- Wedding gifts, cash or in kind, not more than P100,000 worth from your relatives up to fourth degree of consanguinity shall be exempted;
- Wedding gifts, cash or in kind from your relatives, in excess of the P100,000 threshold shall be subject to 2% to 15% donor’s tax (Sec. 99 of tax code).
Your guests shall file their return (BIR Form 1800) within 30 days after your wedding or date of gift is given and shall pay the corresponding donor’s tax due.
My in-laws gave us an apartment and a brand new car as wedding gifts. Will these be subject to tax as well?
As mentioned above, only P10,000 worth of dowries or weddings gifts from parents are deductible from gross gifts. In excess of the P100,000 threshold, gifts such as apartment and brand new car from your in-laws shall be subject to 2% to 15% donor’s tax.
My brother is still single. He takes care of our parents who are already senior citizens. Can he claim our parents as his dependents to avail of additional exemption?
Unfortunately, no. A dependent qualified for additional exemption is limited to a legitimate, illegitimate or legally adopted child only. Although there is a pending bill in Congress, House Bill 6489 seeking additional personal exemption for individual taxpayers who take care of their ‘senior citizen’ parents, this is yet to be passed as a law.
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Mon Abrea is a former BIR examiner and an advocate of genuine tax reform. He serves as chief strategy officer of the country’s first social enterprise, the Abrea Consulting Group, which offers strategic finance and tax advisory services to businesses and professionals. Mon's tax handbook, "Got a Question About Taxes? Ask the Tax Whiz!" is now available in all bookstores nationwide. Follow Mon on Twitter: @askthetaxwhiz or visit his group’s Facebook page. You may also email him at firstname.lastname@example.org.
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