|Posted: July 11, 2008, 1:36 pm - IP Logged|
where can i confirm this? i always thought it was $10K and that they had to pay but your deal is much sweeter!!
Hi, Sandra. I really liked you in Tammy.
There are many sources
(1) Search the LP archives for threads about Gift Tax.
(2) Google the 2 words Gift and Tax.
(3) Go to the IRS official web site and search for info on Gift Tax
It's not that I'm right or wrong - just reporting what the IRS dictates. If you've seen articles that say it is $10,000 then they are old. It used to be $10,000 with a lifetime exemption of $600,000 but it's been increased. Maybe it will increase in 2009 or be repealed altogether in a couple of years. Not that I like any taxation, but gift & estate tax is just plain wrong IMO. The government is saying "Okay, you've done well and want to pass along your wealth to your children. We don't want it to be easy for them, so we're going to impose a big tax."
In any case, unless there is another arrangement, the recipient never has to claim the gift, unless you are talking about income produced from the gift. Once the money or property is transferred, you would need to claim any interest or income. The same goes for estate tax. When someone dies, the taxes are paid by the Trust before the distribution of wealth. Someone can leave you 4 houses or land valued at $1M and, as long as the deceased's total estate is less than $2 million, there are no taxes due on the gift itself. However, once you start collecting rent or you sell them for a profit, you would have to pay taxes. As I've said before, I'm not a CPA or an attorney, but I am familiar with some of these matters. I've also learned a lot on Lottery Post! LOL Of course, whenever this type of wealth is being handled, it is always best to consult with a private banker & attorney who specializes in wealth management.
Regarding the comment I made about paying people for services, we've probably all known weathy people who started businesses and hired their relatives, but just never thought about it when discussing the lottery. I knew a developer who tried to help a woman he was dating. She began working in his office and he paid her $50,000 plus a company car. She basically answered the phones, took messages & typed letters. Doesn't sound like a huge amount of money (hey, I'll take it!) but this was back in the mid 1980s. When his business started to slow down, he told her he had to lower her salary. She quit and filed a lawsuit against him. As the popular quote goes "No good deed goes unpunished."