Legally avoid the gift tax?

Reply #8

AuntiePat — Tue, 14 Aug 2007 20:41:47 GMT

Someone is going to shoulder the tax burden--why not give enough that will cover taxes.

After a certain level, the Gift Tax is 46%, same as Inheritance Tax for anything over $1,000,000 (Lifetime Umbrella Exclusion) per person Liferime ($2.000,000 perperson lifetime if the gifting is done by a married couple), although this may be one of the two or three years that either the Gift Tax or the Inheritance Tax is in abeyance. I DO know that, as the law is currently written, the year 2010 in uni... [ More ]

Reply #7

KY Floyd — Tue, 14 Aug 2007 19:05:14 GMT

For your specific example the answer is no, because your parents would only have a 40% interest. The general, but short answer is maybe. How many checks the lottery writes doesn't necessarily matter when the IRS comes looking for the taxes. Giving a lot of money to your parents may be foolish, anyway.

For the longer answer look here: https://www.lotterypost.com/thread/160814

Reply #6

delS — Tue, 14 Aug 2007 17:15:16 GMT

Your advice to check with an expert real estate agent is correct. Becuase some of the advice floating around in these threads border on tax evasion and can cause a person Jack Whitaker problems.

Below is some real clear but basic information.

How does a reverse mortgage work?

First answer by Jeanine. Last edit by Trixam. Contributor trust: 72 [recommend contributor]. Question popularity: 225 [recommend question]

Answer

Designed for seniors, a revers... [ More ]

Reply #5

joshuacloak — Tue, 14 Aug 2007 13:47:47 GMT

smart aware people use this

a trust

you can set it up yourself and be one of the many Beneficiaries along with your parents

the trustie/your creation intent of the trust ,you can put the intent is to give you must of the money/whatever else in trust , they parents also get some as Beneficiaries alongside you in the trust

the trust pays the tax!

AND say your parents and yours tax's dont GO UP on there other income!

a trust is the simple thing to do.

it p... [ More ]

Reply #4

Uncle Jim — Tue, 14 Aug 2007 12:04:22 GMT

Guru,

Your first question is the way to go. Claim as a group. I think the Hoosier Lottery will pay multiple winners. I'm not sure but it appears that way from some of their press announcements. So you and your parents could claim the ticket and each take 1/3rd. That way you'd each be responsible for your respective share of income tax.

The other option would be to either form a Family Corporation like an LLC or some sort of family revocable living trust. That way each person can get... [ More ]

Reply #3

Guru101 — Tue, 14 Aug 2007 03:56:46 GMT

I thought the gift tax was a lot higher

Reply #2

mountainman — Tue, 14 Aug 2007 02:47:49 GMT

No, you would just be creating a tax burden for your parents. Your parents would be trading gift tax for a 40 percent income tax. I believe gift tax is 10 or 15 percent. 40 percent on millions is a lot of money being lost.

Reply #1

SirMetro — Tue, 14 Aug 2007 02:33:52 GMT

perhaps the simpliest approach is a joint checking account where you deposit funds as you please into it and anyone who's name is on it can make use of the funds as they see fit

There could be ramifications if it's obvious, but if you set it up right, keep it simple and the funds are used reasonably, you could do it that way.

Another idea you should probably consider is what is called a reverse mortgage. This is where you can arrange the mortgage such that you are paying the a monthly chec... [ More ]

Legally avoid the gift tax?

Guru101 — Tue, 14 Aug 2007 02:13:11 GMT

Wouldn't it be possible to avoid the gift tax by claiming as a group? For example, if I spend $5 on a PowerBall, and wanted my parents to get 2/3 of it, couldn't I just say they gave me $2 towards it? Wouldn't this be a legal way of avoiding the gift tax