What taxes due in the donation of a good or money

March 28, 2018

It is very common for parents to buy an apartment or a car for their children, but they are not always aware of the taxes that affect these donations. If the donation is made without the payment of the taxes due, the donor is subject to the booking and fine of the agents of the IRS. So it is worth noting that donations are exempt from income tax, but it is necessary to pay off state taxes. In this way, the statement to the IRS needs to have:

  • The description of the goods and values transferred, and
  • Information about who receives or makes the donation.

If you donate some good or money you need to declare in the income tax adjustment of the year following the donation. Therefore, even if the values offered to third parties are not taxed, it is necessary that the movement appears both in the statement of the recipient, and of who is donating the good or money. This movement of transfer of a good or money will focus on the state tax known as ITCMD, ie the tax on transmission cause Mortis and donation of any goods or rights (ITCMD). The donor must include the donation in the item "payments and donations made" of his income tax return, in order to enter the name and CPF of the beneficiary as well. Important to note that in the case of money donation, the value must be identified by code number 80, the code of donations in kind. In the case of those who receive the money, the exact amount of the donation must be included in "free and non-taxable income". In short, it is necessary to inform the name, the number of the donor's CPF, the date and the value received in the breakdown of the Declaration of goods and Rights. Although there is an exemption from income tax on any donation, irrespective of the value or degree of kinship between the parties, this value is still subject to the ITCMD. In addition to focusing on donations, ITCMD focuses on inheritances in a general way.

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