Living Expenses vs Gifts

Reply #8

grengrad — Tue, 02 Sep 2008 14:04:58 GMT

People often split winningtickets with their family and the government looks the other way, butthey do not have to, and if you want to split winnings unevenly, it isgoing to be pretty hard to convince a judge that your daughter has beenpaying 15% of your lottery ticket costs and should get 15% tax free,without a legal document showing it is true. The IRS may never push theissue, but it is better to be safe than sorry.

Reply #7

grengrad — Tue, 02 Sep 2008 13:43:22 GMT

Both are taxable, but educational and medical expenses are gift tax exempt.

Letting immediate family live in a house that you own and use is generally not considered taxable. Buying a house for someone else to live in, and just putting it in your name on it, would definately be taxable. Since you are not giving them the house, you will be liable for gift tax on the value of renting the home.

Remember that the gift tax exemption of $12,000 stacks.

So, if you are married, both y... [ More ]

Reply #6

myturn08 — Tue, 02 Sep 2008 11:48:41 GMT

In senario #2- if you are supporting someone i dont see how that can be taxed. They have not recieved any big checks to their bank account and your child is using all of your resources. There is really nothing you are putting in their name..no deposits to their bank account.. So no there is no gift tax... Regardless if the person is in college or employed, your giving them resources of your to use. You can go far as to say in a common law marriage, or someone is dating, does the other partner ha... [ More ]

Reply #5

Piaceri — Tue, 02 Sep 2008 03:26:53 GMT

So I am providing food, clothing, and shelter for my adult children. How is that a gift? How about I employ them to pull weeds in my flower beds, or vacuum and sweep the house every day?

How about a real life situation - I currently supply a room, a bathroom, food, car insurance, cell phone, gas money, etc for my 22 yr old daughter who is unemployed and not enrolled in college. I'm not rich by any means, but if you were to price all that on the open market, my guess is it's more than $12k va... [ More ]

Reply #4

GamerMom — Tue, 02 Sep 2008 01:40:01 GMT

I always thought if I won I would do lots of gift cards--gas, clothing and department store types--so they couldn't be traced. Not sure if that would help out tax wise but it was just an idea.

Reply #3

KY Floyd — Tue, 02 Sep 2008 01:39:13 GMT

Which part of gift is confusing? If you give somebody something it's either a gift or payment in exchange for something. If it's a gift, every penny of it is subject to the gift tax rules.

Reply #2

savagegoose — Mon, 01 Sep 2008 18:12:48 GMT

http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States

might help

Reply #1

DC81 — Mon, 01 Sep 2008 16:09:52 GMT

You'd think there would be exceptions for immediate family... Either parents to children, children to parents or children/parents to siblings. Best way to go about some of it I guess would just be to have it in your name or just *cough* under the table as long as it isn't a large amount or something that would flag the IRS. ;)

As nuts and aburd as the gift tax is, it being 45% paid by the giver of the gift is even more nuts.

Living Expenses vs Gifts

Piaceri — Mon, 01 Sep 2008 13:32:20 GMT

Just want to open for discussion the difference between gifting cash to someone vs paying the living expenses for someone, and how this affects gift taxes.

Scenario #1 - You win the lottery jackpot and you gift cash to your young adult child. Obviously this is subject to gift tax rules.

Scenario #2 - You win the lottery jackpot and purchase a condo for your young adult child to live in, plus you pay all the taxes, utilities, and other expenses for that housing. Then you give the young adul... [ More ]