Setting up a trust to avoid gift tax?

Reply #13

TexasDreams — Sat, 15 Dec 2007 02:38:06 GMT

This might answer some questions regarding if its legal, its a paper from an attorney who is a specialist in this area, but remember it pertains to Texas law and each state is different, I don't believe it addresses the IRS, I am sorry if its a long post but I am not aware of an attachment link-

TRANSFERS OF PROPERTY

Many asset protection techniques involve an evaluation of the ownership of property

available to satisfy claims. In many circumstances, a debtor's assets available to c... [ More ]

Reply #12

Coin Toss — Thu, 13 Dec 2007 04:48:00 GMT

Think about this - if you take out a safe deposit box a a bank in your name, the IRS can go through that box anytime it wants to. If you form a coprporation, they can't legally go through it.

Of course, there's all kinds of reasons not to form a corporation (as a private individual) but let's just say if you ever come into a big score, get advice from people who relly know their stuff.

Two things you never want to mess with are the tax people and the SEC.

Reply #11

Lucky Cliff — Thu, 13 Dec 2007 00:08:03 GMT

Your right that the IRS doesn't get the title transfer information. However should the IRS want to look into the title information and they have a good reason to I'm sure they could get a subpeona and thereby get the information.

As far as your suggestion, it is highly unlikely that the IRS would catch onto this scheme. However as far as it being legal, don't think so, even if your tax lawyer says so. My advice to you would be to get a secoond opinion and then a new lawyer

Reply #10

justxploring — Wed, 12 Dec 2007 23:59:16 GMT

That's a great question, Tinker. That's why I like the answer csfb gave the best because a good CPA is worth the fee. As much as I know (or think I know) there's a lot more that I don't know. Nobody is going to get caught by slipping someone $500 when you go to lunch or taking a friend on vacation. But any dramatic change in one's lifestyle would be noticed.

There are probably a lot of ways to help your friends, like buying yourself a 2nd home and letting them stay in it. The IRS frow... [ More ]

Reply #9

justxploring — Wed, 12 Dec 2007 23:34:22 GMT

I bought a car, titled it in my name. Paid cash on the line. Six months later, I transferred ownership/title to my son for one dollar! The government cannot Mandate how much you chose to sell your personal property for. So it was completely legitmate. It wasnt a gift because he paid for it. This too can hold true for real estate. If I want to sell my land or house for a miniscule amount and transfer title to someone, that is my right.

This is totally false. Yes, it is a gift. The I... [ More ]

Reply #8

TheGameGrl — Wed, 12 Dec 2007 23:24:11 GMT

The Government (IRS) doesnt get the title transfer information.

I appreicate your effort to look into the IRS, but the IRS doesnt audit state departments where the records are kept. What was stated is completely legal. Ask a tax lawyer. I know I did.

Reply #7

psykomo — Wed, 12 Dec 2007 03:16:21 GMT

Great question........but, worded in a stupid>>>>>>>>>>>>>>> CONTEXXXXXXXXXXX!!!!................................HAhaHAhaHAaaaaaHA

First of all......you will need a G@@D^^^^^^^^^^law firm??????????????????????????????????????????????

Most Megamillion winner's are a MARK for most lawyer's a JOKE^^^^^^^^^^^^^^^^^ (beware FIN's^^^^^^^^^)

too, and they laugh their ass-off if they think they actually HAVE a

real Megamillion winner in their OFFICE!!!!!!!!!!>>>>>>>>HAHAHA!

LOL... [ More ]

Reply #6

Lucky Cliff — Wed, 12 Dec 2007 00:38:42 GMT

TheGameGirl...you are correct in saying that the government cannot mandate how much you chose to sell your personal property for. However the government (i.e. the IRS) dies have a way of not letting you avoid paying the gift tax, it is called fair market value. See below the IRS position on Gift Taxes.

Gift Taxes

IRS Tax Tip 2007-39

.

Gifts include money and property, including the use of property without expecting to receive something of equal value in return. If yo... [ More ]

Reply #5

TexasDreams — Tue, 11 Dec 2007 20:13:17 GMT

Hi ambelamba,

I posted a little info on trusts from a law firm who is certified in this area; however, it pertains to trusts under Texas law, but it didn't post. So I have copied/paste some information regarding trusts,again. A trust is a ideal asset protection, Estate Tax avoiding and Generation Skipping delay tool for people, especially lotto winners. Here's how it works in Texas-----

Gift assets outright to third parties (typically family members)

If an individual... [ More ]

Reply #4

TheGameGrl — Sat, 08 Dec 2007 22:51:32 GMT

AN alternative suggestion- Which I have done in graciousness towards a family member.

I bought a car, titled it in my name. Paid cash on the line. Six months later, I transferred ownership/title to my son for one dollar! The government cannot Mandate how much you chose to sell your personal property for. So it was completely legitmate. It wasnt a gift because he paid for it.

This too can hold true for real estate. If I want to sell my land or house for a miniscule amount and transfer

Reply #3

csfb — Sat, 08 Dec 2007 20:16:48 GMT

Trust is an extensive subject matter, but I am assuming you are referring to a revocable private trust, or what is commonly called living trust. But there are other trusts and sub-trusts depending on what your ultimate objective is, the size of your estate, and the extent of your bounty.

A trust is a good instrument when planning the preservation of your estate, without a big chunk of it going to estate taxes and gift taxes and assuring that your designated beneficiaries are well-provided.

Reply #2

Tinker — Thu, 06 Dec 2007 15:22:24 GMT

Can I loan friends any amount of money? Then give them a life time to pay it back

Reply #1

justxploring — Thu, 06 Dec 2007 06:33:09 GMT

Setting up a trust to avoid gift tax?

No. First of all, the correct word is reduce not avoid when you talk about paying taxes. Also, a beneficiary is someone who gets your money when you die. But since you asked about gift tax (not estate tax) mentioning life insurance and other estate planning vehicles isn't going to answer your question. No matter how old you are, all of us can get sick or die, so it's important to make sure that your loved ones are protected with either a will, a tr... [ More ]

Setting up a trust to avoid gift tax?

ambelamba — Thu, 06 Dec 2007 05:33:22 GMT

I am not sure how it works. So let's say I won the current Megamillions jackpot. Beside splitting the jackpot with my family members (10% for my parents and 1.5 for each of my sisters), I want to help out my friends, who are two of them. One wants Mustantg Cobra GT and the other needs to pay off hios home loan. So if I grant them some money, does setting up a trust and designate them as my benificiaries help