Free Republic
Browse · Search
News/Activism
Topics · Post Article

Thanks!
1 posted on 07/07/2002 10:17:44 AM PDT by Goodlife
[ Post Reply | Private Reply | View Replies ]


To: Goodlife
Suggest you go to the IRS website for the definitive answer, but, yes, you can give each of them $10,000 each year.
2 posted on 07/07/2002 10:23:29 AM PDT by billhilly
[ Post Reply | Private Reply | To 1 | View Replies ]

To: Goodlife
I don't think so. To be tax deductable it would have to go to a legal charity. And you can't get around that by setting up a charity to benefit your family.

You can give each of your parents (or anyone else) up to $10k as a gift and it will not be taxed as income to them (that doesn't change whether it's taxable to you). If you're married your wife could also give them each 10k. So you could give them up to 40k per year without it being taxable income to them.

BTW, I'm not a tax advisor, but some years ago I worked in the insurace biz, and learned a lot about this stuff. Still, check it out with a real tax advisor to make sure things haven't changed.

3 posted on 07/07/2002 10:29:40 AM PDT by Hugin
[ Post Reply | Private Reply | To 1 | View Replies ]

To: Goodlife
You may not claim an income tax deduction for a gift to a family member. You may claim a charitable deducion only for gifts to recognized charities and governments.

If your family members are in a lower tax bracket than you are, you might want to give them appreciated assets. When you do so, you will need to inform them how much you paid for the asset. Your basis would carry over to them. When they sell the asset, it would be taxed to them.

You may give up to $11,000 (at fair market value at the time of the gift(s)) per person per year without having to file a gift tax return. The gift must be of a present interest in property to qualify for this exclusion. If you are married, you and your spouse may elect gift splitting. In such a case, you may give up to $22,000 per person per year even if the property is held in your name only. You may give more than $11,000 ($10,000 adjusted for inflation) (or $22,000 if gift splitting) per person per year, but you would have to file a gift tax return. Unless you gave a very large amount, you would not likely incur any gift tax liability. However, you would use up some of your unified credit.

In addition to the annual $11,000 exclusion, you may pay money to a provider of medical care for medical expenses incurred by anyone, and you may pay tuition for another person directly to the school. The amounts are not limited and they are all excluded from taxable gifts. The money must be paid directly to the school or the medical provider and not to the individual.

15 posted on 07/07/2002 12:11:30 PM PDT by TheCPA
[ Post Reply | Private Reply | To 1 | View Replies ]

To: Goodlife
You have been given good advise. However, if you are seeking a way for you to avoid paying taxes on the newly found money, there is none outside of the standard charity and other deductions. You cannot get away with skipping the taxes if you gift the money to others. What you are avoiding is making them have to pay taxes on the gift, if you stay under the limit.

Bottom line, you pay, they don't.

18 posted on 07/07/2002 3:57:08 PM PDT by T. P. Pole
[ Post Reply | Private Reply | To 1 | View Replies ]

To: Goodlife
Just say you owe it to me. They won't touch it. IRS
19 posted on 07/07/2002 8:23:29 PM PDT by exmoor
[ Post Reply | Private Reply | To 1 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson