In 2023, Shohei Ohtani, the celebrated Dodger, bestowed a Porsche upon Ashley Kelly, wife of his teammate, in a gesture of gratitude. Ashley played a pivotal role in Ohtani’s decision to join the Dodgers, notably by offering her husband’s jersey number, 17, to him.
Regarding the taxation of such gifts:
- Under IRS guidelines, the responsibility for gift tax lies with the donor, not the recipient.
- For 2024, gifts exceeding $18,000 to an individual must be reported. However, “gift splitting” allows for a combined threshold of $36,000 when giving to a couple.
- To incur gift tax, one would need to exceed a lifetime exemption of $13.61 million in gifts before gifts over $18,000 become taxable. This also impacts the estate tax exemption upon one’s death.
Given the likely value of the Porsche exceeds the reportable threshold, Ohtani or his financial advisor would need to file IRS Form 709 to account for this gift.