Tax Question

Discussion in 'Countryside Families' started by tallpines, Jan 6, 2007.

  1. tallpines

    tallpines Well-Known Member

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    Gifted Money


    How much money is one allowed to receive as a gift before it needs to be reported on your taxes?


    Is "that" amount the final "total" that one individual is allowed to receive in one year"?

    Or---can you receive "that" same amount from more than one person without it being reportable?
     
  2. Alice In TX/MO

    Alice In TX/MO More dharma, less drama. Supporter

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    You can receive LESS than $12,000 from an individual and not have it taxed.

    I could give you $11,999, and Melissa could give you $11,999, and Chuck could give you $11,999, and there is not any taxable income.
     

  3. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    Likewise, if parents are trying to move assets to their children your mother can give you $11,999 and your father can give you (under a seperate check) an equal amount. If the gift takes place as the year changes your parents can, together, give you $23,998 in 06 and on January 1 give you another 23,998 without triggering gift taxes.

    They can also, by the way, give your spouse an equal amount, so as a couple you could receive $47,996 in 06 and an equal amount in 07...

    And then we come to the children...

    You can make a great and whacking contribution ($60,000 sticks in my head but you'd need to check with a tax advisor) to a 529 "Educational IRA" one time gift within a 5 year period without triggering a gift tax issue.

    I'd remind you, however, that any gifts to minor children in your care are supposed to be spent for their benefit, and if the gifts are sizeable I'd urge you to document where the money goes. So, for example, while it might be argued that your 3 year old benefits by riding in the BMW convertable it might be hard sell to the IRS to claim the full value of the BMW should come from the cash gift to the kid.
     
  4. anniew

    anniew keep it simple and honest Supporter

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    I've heard where large gifts given several years ago could be pro-rated over the intervening years so that it was made "legal." Check with an accountant if you are unsure and if the amount is over the legal yearly limit.

    You didn't really give us a lot of information, so I'll just add that if it is a case of someone who is terminally ill, that person could set up an account in his/her name with you on the account. Upon his/her death the money would then be yours free and clear. Check with a bank or whatever to make sure you get the right type of account.
    Ann
     
  5. tallpines

    tallpines Well-Known Member

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    Oh my! That's a WONDERFUL and GENEROUS idea!
    I'll p.m. each of you my address! :hobbyhors
     
  6. tallpines

    tallpines Well-Known Member

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    Thanks for the info!

    I guess we're okay then.

    The folks have given my sibling a few handouts over the years---and they want to "even" things out.

    They gave me one check backdated to Dec 20, 2006.

    And they intend to "each" give me another in a few weeks.

    Thanks, again.
     
  7. modineg44

    modineg44 Well-Known Member

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    The GIVER pays any gift tax due, not the receiver!!! Once you get the money, you would pay tax on any interest you earned, dividends if you buy stock with the money, etc. To repeat, the GIVER pays the tax.

    Nancy
     
  8. arabian knight

    arabian knight Miniature Horse lover Supporter

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    I know when I inherited a house I AM the one that had to borrow the $4,500 to pay for the inheritance tax~! I was only a grandson so my share was not as large as a son's would have been before taxes are do.
     
  9. modineg44

    modineg44 Well-Known Member

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    Google "who pays gift tax" and you will find the answer.

    Nancy