Gift Taxes

Reply #31

delS — Wed, 07 Dec 2005 18:15:05 GMT

dhlynch-thanks for your advice. I do have a problem with it on several levels; however, I would never put a person's name in a legally binding document that I was not given consent to do. Also, putting their name in would probably present more headaches than I would want. If for example I won $110,000,000 and for whatever reason they found out their name was in this document, I would not underestimate even relatives, who would probably challenge me for more of the cut, rather than a gift. I'd... [ More ]

Reply #30

dhlynch — Wed, 07 Dec 2005 18:09:03 GMT

I'm not an attorney, but I think in most states this would work. Type up a document today declaring that you have a lottery club and list the members - everyone you would want to give money to if you won. Then list what percentage each person gets if the club wins. Write down that you have the authority to purchase lottery tickets on behalf of the club. Maybe even get it notarized to legally verify that it was created before the winning numbers have been drawn.Make sure everyone on your list can... [ More ]

Reply #29

sirbrad — Wed, 30 Nov 2005 23:19:23 GMT

I read something about a $2,000,000 exclusion. What does that mean? You can give up to $2 million dollars once a year, or one time only without having to pay tax

Reply #28

time*treat — Wed, 30 Nov 2005 21:28:12 GMT

10G to take out the trash runs you into a prevailing wage issue. Loans are not taxable, though. Interest is.With that info and an actuary table, you could figure how to loan mom enough to cover the interest payments and get use of the mill in her expected lifetime. You'd better win quick; a million doesn't go as far as it used to.

Reply #27

Fwup — Wed, 30 Nov 2005 18:27:56 GMT

Couldn't you just form a trust, and name yourself and the people you want to give money to as members of the trust? Then claim the jackpot in the name of the trust instead of yourself. That way you wouldn't be double taxed. Instead of the IRS taking their share and then giving what's left to you, they would take their share and then give what's left to everybody.

Reply #26

delS — Wed, 30 Nov 2005 17:17:14 GMT

The bottom line is, it is better to do the right thing up front regardless of your feelings, opinions, or experiences with the IRS. The problem with your scenario is, the moment your family members monies run out, they are going to blow the whistle on your tax avoidance scam, and your butt will end up broke, in jail and another sad lottery story. I posted the table because it would appear to be more prudent in looking at how much you plan to give a loved one, factor in the amount of tax you wi... [ More ]

Reply #25

whitmansm2 — Wed, 30 Nov 2005 13:29:40 GMT

Wouldn't it be easier just to hire your family memebers? Take out the state and fed taxes for them and let them be self employed and they can get it back when they do their taxes? After it gets to be whatever amount you were going to give them; fire them. lol I want to give my mom 1mil. So I hire her to.....uh.......uhm.....take my trash out. I pay her $10,000 a month plus, as a sign on bonus, I give her a house. After $900,000 is given to her, I fire her for missing the trash man one ti... [ More ]

Reply #24

delS — Tue, 29 Nov 2005 14:38:27 GMT

I appreciate everyone's opinion on this subject, and the info as well. Below is a table I found on msn.com/money For what its worth to any future LP Jackpot Winners, you may want to copy and paste and file away.Estate and Gift Taxes Unified Gift and Estate Tax RatesIf the amount is: Tax is: Over But not over Tax +% Excess Over$ 0 $ 10,000 0 18 $ 0 10,000 20,000 1,800 20 10,000 20,000 40,... [ More ]

Reply #23

Badger — Tue, 29 Nov 2005 11:35:23 GMT

I stress I am also no tax expert. But my brother has done people's income taxes for decades now, and we were talking about this within the last year (just a conversation) -- I seem to remember him saying that anything over the 11K per year would be subject to a 30% gift tax. And the tax is assessed on the person giving the gift.Therefore, say you wanted to give someone $20,000 during one year (regardless of how you did it, one 20K lump sum or five $4,000 checks, whatever) then you would owe the... [ More ]

Reply #22

sirbrad — Tue, 29 Nov 2005 05:46:32 GMT

What does all this mean for the gift tax? The lifetime gift tax exemption is $1,000,000 and will continue to be $1,000,000 for the indefinite future. So you can make gifts that are worth up to a million bucks during your lifetime without paying the gift tax.The maximum gift tax rate for gifts exceeding $1,000,000 will drop from 48 percent in 2004 to 45 percent in 2009, and to 35 percent in 2010 and beyond, which is the same as the maximum individual tax rate.So why did Congress dramatically redu... [ More ]

Reply #21

sirbrad — Tue, 29 Nov 2005 05:41:28 GMT

http://www.turbotax.com/articles/TheGiftTax.html If you give people a lot of money or property, you might have to pay a federal gift tax. But most gifts are not subject to the gift tax. For instance, you can give up to the annual exclusion amount ($11,000 in 2004) to a person, every year, without facing any gift taxes, and without the recipient owing an income tax on the gifts. And you can give up to $1,000,000 in gifts, total, in your lifetime, before you start owing the gift tax. So does that... [ More ]

Reply #20

sirbrad — Tue, 29 Nov 2005 05:30:21 GMT

Yeah the IRS does not want anyone to get out of working and paying more taxes. They take advantage of the lottery BIG time, and steal from all the pots. Almost makes you want to boycott the lottery, but then of course you also still stay poor. I think that if you can prove that you had a pool with a family member, you can avoid some of the taxes? I am not sure how much that would be though. I would most likely set one family member up with a million dollars, at the highest returnable interest ra... [ More ]

Reply #19

time*treat — Tue, 29 Nov 2005 03:45:25 GMT

justxploring said: Gosh, I'm getting paranoid..like the IRS reads these posts??not only do they read these posts, if you're a powerseller on an auction site, they're taking a closer look at your returns too. Google that for a good scare.It's only paranoia if they're NOT out to get you.

Reply #18

rlevins — Tue, 29 Nov 2005 02:34:50 GMT

Not only chances of bad advice from lawyers but also bad advice from financial planners. So the bottom line is that in additional to getting advice from these advisors, you must also be fairly knowledgeable and also be interested in participating in managing your affairs instead of just leaving it for others to manage and go around partying on 24/7 basis.

Reply #17

justxploring — Tue, 29 Nov 2005 01:48:54 GMT

Somehow I lost part of my post. I wasn't telling people to commit tax fraud, but remarking on how wealthy people spend money so freely, like $10,000 or more on shopping sprees, so it would be unlikely a few thousand here and there would be missed if you were worth tens of millions. Gosh, I'm getting paranoid..like the IRS reads these posts?? I'm so poor, if they showed up at my place they'd probably pay me money! But seriously, a good tax attorney could give the best advice. That being said, I... [ More ]

Reply #16

justxploring — Tue, 29 Nov 2005 01:14:10 GMT

I came across this thread because I was searching for tax info. I haven't won anything yet, but I was curious. I'll read the article, but I know the whole idea of gift tax is to keep a wealthy person from giving away his taxable estate when he gets sick or in trouble. I think it's ludicrous to pay federal and state tax on winnings and then have to pay tax if you want to give some away, but I don't run the IRS. However, Chewie is right when he says you can hire relatives to work for you. It's... [ More ]

Reply #15

Chewie — Tue, 15 Nov 2005 18:43:32 GMT

Its easy to give away money. Rolling a heavy ball up hill isn't always the best way to reach the top.Hire someone to make you 55% profit. Pay them huge hiring bonus. Pay their expenses. Provide housing, transportation, etc. Pay huge wages. Fire them for failing to meet their contract. Pay huge termination bonus. They keep house, money, and all other assets they earned. Read the article. the head of Disney did that - and it held up in court. Remember, you're rich. Get used to being specia... [ More ]

Reply #14

Raven62 — Tue, 15 Nov 2005 18:14:35 GMT

Consult a Professional that Specializes in such matters.

Reply #13

pigsNtrees — Tue, 15 Nov 2005 17:50:17 GMT

I have noticed that the rich and we are taking stinking here, set up charities then name their family members to the board of directors. Maybe this is how they share without being taxed to death

Reply #12

delS — Tue, 15 Nov 2005 17:43:18 GMT

I hear you and understand what you and Whitsamin2 are saying, however, I just believe there are better tax strategies out there that won't keep the bullseye of the tax man on my back. I don't think a lot about taxes are fair either. I'm with you on that. I just believe in the offices of the IRS, they are keeping files on big jack pot winners, and thgey probably scrutinize very (no make that extremely) close the taxes and spending of winners.

Reply #11

pigsNtrees — Tue, 15 Nov 2005 17:36:09 GMT

If your mothers name is on it she would probably pay taxes. This would be an account of many, with your name on it. She could withdraw the cash she needs with the debit card, also on the house you bought for her (and you'd need to keep it in your name) just use automatic withdrawal (from this account) for all the utilities.I'm all for paying my share of taxes. That said, this money has already been taxed before you even get it, then hit with a whopper of tax if you give it away. That doesn't see... [ More ]

Reply #10

whitmansm2 — Tue, 15 Nov 2005 17:17:02 GMT

That's a good question, though. Why couldn't someone just open an account (checking) with their name and say, for example, their mothers name. Then give mummsie a debt card and let her spend what she wants

Reply #9

delS — Tue, 15 Nov 2005 17:09:08 GMT

pigsNtrees-This gift tax discussion has nothing to do with debit cards or account. When you start distributing amounts of money - gifts, ranging from $20,000 to $1,000,000 your estate is impacted and the tax man cometh.

Reply #8

pigsNtrees — Tue, 15 Nov 2005 16:59:34 GMT

First off please excuse my ignorance but, wouldn't it be simpler to open an account then give your loved one a debit card

Reply #7

nomoneybabe — Tue, 15 Nov 2005 16:25:02 GMT

Hello delS:All I know about gift taxes is: after you give someone your money (bigger than > $11,000) then you have to be taxed about 41-49% on the given amount!!!I was also just learned about this thing, and I'm pretty shocked!So ...ex: if you give 50% of your winning to someone (greater than $11,000) that meant you will be taken about almost 75% (including the gift + gift tax) of your winning! So be carefull....P.S.: Please make sure the tax questions with the goverment before making given big... [ More ]

Reply #6

MrBobb — Tue, 15 Nov 2005 16:00:13 GMT

Your best bet is to direct your questions to the IRS. I have eamiled or called them in the past and they have been very helpful. They could probably give you a good estimate of what the taxes would be.Check their web site for contact information: www.irs.gov.You may want to contact your state department of revenue as well.

Reply #5

Chewie — Tue, 15 Nov 2005 15:19:48 GMT

Good old filter, eliminated the numbers, but the link remained.

Reply #4

Chewie — Tue, 15 Nov 2005 15:18:22 GMT

I don't see what is unique to your question that is not answered in one of the links. The gift tax is based on amount, per individual, up to a specified limit. Whether you chose the number five, ten, twenty, thirty, or one hundred; does not make your question unique.A short research would have revealed:http://www.smbiz.com/sbrl017.htmlUnified Gift and Estate Tax Rates If the amount is: Tax is: Over But not over Tax +% Excess Over $ 0

Reply #3

delS — Tue, 15 Nov 2005 15:03:44 GMT

Hey Todd, you probably have seen and heard the most about the impact of Gift Taxes here, what can you shed on the subject? Any threads from previous winners around

Reply #2

delS — Tue, 15 Nov 2005 15:01:15 GMT

Chewie-My Google was and is working fine. I already received answers from there as well as yahoo and msn. However, they are not specific enough to my question, and my posting had to do more with real practical experience, hoping one of the LP members who have won, could shed more practical light. Thanks though.

Reply #1

Chewie — Tue, 15 Nov 2005 14:58:49 GMT

Assuming your google option has been disabled, research is available at this link.http://www.google.com/search?sourceid=navclient ie=UTF-8 rls=GGLD,GGLD:2005-05,GGLD:en q=gift+taxResearch is good, it provides answers to questions.

Gift Taxes

delS — Tue, 15 Nov 2005 14:46:31 GMT

Good morning-I'm not an expert tax person, and God knows the tax attorney would be my first hire if I won big, but here goesThis is for all the experts that we have here at LP, and I am not being flip about my statement. Say you won the $310 MM Jackpot, and after all the initial taxes were taken out, you walked away with $114,000,000 cash option. You had 25 family and Friends you planned on giving anywhere from $20,000 to $1,000,000. The gift tax law says you can give away up to $11,000 befor... [ More ]