[GeronL]

Early withdrawal of IRA’s will soon be taxed 20% under ObamaCare I heard.

Plus there is a 50% gift tax, I don’t know if that applies to a $15K gift or not though. You might want to check with someone who would know.

[Lichgod]

Does the person getting the gift money have to declare it as income and pay tax on it?

Example: 100 of my closest friends each gift me $10,000 for a total of gift of 1,000,000 as their only gift for the year. They pay no gift tax as the amount is under the limit. Do I have to pay?

I think the answer is the amount equal to the current year’s gift limit ($13,000 for 2010, I think), is tax free and the remaining is counted as income and fully taxed.

Thoughts?

[The Great RJ]

Our byzantine tax code is a result of Congress constantly tinkering to redistribute wealth and reward special interest groups. Think of the millions we spend having out taxes prepared each year not to mention the army of IRS employees who process and enforce this mess.

Imagine (only in our dreams) if we just paid a flat per cent of our income in federal taxes... no bizarre deduction regulations; no loopholes; no need for H&R Block, computer programs or CPAs; just file your taxes with a postcard. Better still abolish withholding and make tax due day November 1st. Perhaps if taxpayers had to write a check for their taxes shortly before every election they might make better choices at the ballot box.