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Would you wait until 2011 to gift money away (no gift/estate tax 2011)

Topic closed. 22 replies. Last post 10 years ago by pigsNtrees.

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Would you wait until 2011 to gift money away (no gift/estate tax 2011)

Yes. That was my plan. [ 2 ]  [11.11%]
No, they should be able to get it now regardless. [ 9 ]  [50.00%]
Let them decide (but they pay taxes if now). [ 4 ]  [22.22%]
Undecided [ 3 ]  [16.67%]
Total Valid Votes [ 18 ]  
Discarded Votes [ 2 ]  
MegaWinner's avatar - Lottery-029.jpg
New Jersey
United States
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348 Posts
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Posted: March 18, 2007, 12:26 am - IP Logged

If you were to win a large jackpot in within the next 2 years, would you make your "Share List" wait until 2011 to get their share when there is no Gift/Estate tax?  This means there would be no 46% gift tax on the money you would gift away and therefore the people on your "Share List" would get 100% of what you wanted to give them, not 54% like it would be if you give it to them now.

Me, I would let them choose but warn them that if they take it now, they pay the gift tax out of their share and they cannot come back for more.  I would also make them aware thatif they chose to wait, their share would sit in an interest bearing account and they would actully get MORE money if they waited.

What about you guys?

Sun Smiley I got my fingers crossed ready to win!!! Sun Smiley

    Coin Toss's avatar - shape barbed.jpg
    Zeta Reticuli Star System
    United States
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    Posted: March 18, 2007, 12:37 am - IP Logged

    Not sure about waiting til 2011, but I'd definitely try to do something before 12-21-2012

     Scared

    http://www.december212012.com/articles/mayan/index.shtml

    Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

    Lep

    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

      grengrad's avatar - nw rogue.jpg
      Raleigh
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      January 17, 2007
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      Posted: March 18, 2007, 1:05 am - IP Logged

      I would give them the option of spliting it up between now and then however they wished.

        MegaWinner's avatar - Lottery-029.jpg
        New Jersey
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        Posted: March 18, 2007, 1:19 am - IP Logged

        I would give them the option of spliting it up between now and then however they wished.

        Remember, if you give it to them now, either you pay the 46% gift tax or it comes out of their share.  Either way, your giving away 46% to uncle sam.

          Coin Toss's avatar - shape barbed.jpg
          Zeta Reticuli Star System
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          Posted: March 18, 2007, 1:27 am - IP Logged

          This is where greed really comes in...I can actually imagine people saying, "You've got millions, you take care of the gift tax." 

          Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

          Lep

          There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

            MegaWinner's avatar - Lottery-029.jpg
            New Jersey
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            Posted: March 18, 2007, 1:29 am - IP Logged

            This is where greed really comes in...I can actually imagine people saying, "You've got millions, you take care of the gift tax." 

            And my response will be, "No no no, either YOU take care of the tax or your not getting a single penny.  If you don't like it, too bad."

            Of course if its a close family member I might feel a little bad later but I do pretty good at not making important decisions based of emotions. 

              justxploring's avatar - villiarna
              Wandering Aimlessly
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              Posted: March 18, 2007, 6:06 am - IP Logged

              Where are you getting this information?  The estate tax law is changing in 2010.  AFAIK, the gift tax will not be repealed, but I might be wrong.  They are 2 different things. Anyway, you can give much more than the $12,000 allowable in one year by applying the unified tax credit, so you must be talking about an awful lot of money at once. Even if you exceed the $12,000 limit annually, the excess is applied toward your lifetime gift tax exclusion.  So if you know 10 people you plan to help, they can each receive a lot of money, up to $100,000.  Just make sure you file the correct forms like a 709.

              My answer would be none of the above choices.  Of course I would get legal advice, but I wouldn't make people suffer because of it. Depends on how urgent the need is. Most people I know would benefit greatly by receiving an extra $12,000 a year, so I don't think waiting would be a problem.  The tax exemption law allows a person to also pay for health insurance premiums and necessary medical procedures.  So there really isn't anyone I know who would suffer for another few years. 

              It would take too long to list, but gift tax isn't paid as often as some people here seem to think. There are many ways of paying people without breaking the law.  For example, let's say I give $12,000 to a friend or relative who needs money because she is unemployed.  This will not have any effect on the unemployment compensation she receives. If that isn't enough to make ends meet, I can hire her as a secretary, caretaker, dog sitter (whatever) and pay her a reasonable salary. If she is a single parent, I can also pay her child $12,000, plus cover medical expenses & education. 

              The choices you list above sound as if the winner is on a power trip.  "Do it my way or suffer the consequences."  A good tax consultant can help you make these important decisions.  Anyway, I will apologize if I am incorrect, but I think you are misreading the tax laws.

                tntea's avatar - Lottery-059.jpg

                United States
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                Posted: March 18, 2007, 6:57 am - IP Logged

                I don't plan on giving any away..

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                  justxploring's avatar - villiarna
                  Wandering Aimlessly
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                  Posted: March 18, 2007, 7:37 am - IP Logged

                  I don't plan on giving any away..

                  I assume you are joking, right?

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                    Amarillo/Austin
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                    Posted: March 18, 2007, 8:35 am - IP Logged

                    The government has no right to have that much control over people's lives.  We have been so busy trying to get something for nothing over the past 75 years that we have sold our freedoms for 30 pieces of silver.  Between greedy lobbyists and toady politicians we are no longer a free people.  We have voted ourselves into chains.  It is interesting that we plot and scheme to avoid taxes that are immoral and unconstitutional.  The poll itself is idiotic.  The real answer is to refuse to pay at all.  I wonder what would happen if millions of Americans just said NO to the military industrial complex and refused to pay illegal and immoral taxes?

                    Orangeman                            US Flag

                      justxploring's avatar - villiarna
                      Wandering Aimlessly
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                      Posted: March 18, 2007, 12:59 pm - IP Logged

                      Bravo, Orangeman!  I agree that taxation is theft, only because the government spends the money we earn any way it pleases.  It uses trillions of dollars to destroy a foreign country instead of providing shelter for the homeless and food for the hungry.  It uses our taxes to destroy the environment instead of to save it. 

                      I want to comment on how eloquently you described the whole idea of gift tax.  It is telling people who have either been very wise or frugal that they cannot leave their heirs wealthy, that it is much better to find a loophole or to die poor.  Not everyone who is affected by the estate tax is a multi-millionaire. I know a man who worked hard for over 40 years and invested in Florida real estate with his savings & overtime so his children could have a better life. He now sends the maximum allowed to his children and grandchildren, since he was advised they would pay such a huge chunk of their inheritance to the government because his property is now worth millions.  (I keep asking him to adopt me. lol)

                      You can't even give your home to your children without claiming it as a gift.  That's why I mentioned other ways of getting around the gift tax without breaking the law. One is to buy life insurance. Regarding the suggestion of refusing to pay,  I honestly wouldn't last a week in jail. I can't even sleep in my own apartment!

                        JAP69's avatar - alas
                        South Carolina
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                        Posted: March 18, 2007, 1:14 pm - IP Logged

                        If I had won millions  and I wanted to give money to my children or grand children it would be very simple.

                        Draw out the cash and hand it to them.

                        I do it now but on a small scale. real small ROFL

                        My money and I will do as I da*** well please with it.

                        WHATT

                          justxploring's avatar - villiarna
                          Wandering Aimlessly
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                          Posted: March 18, 2007, 5:50 pm - IP Logged

                          Aha, it took some "googling" but I found an article.  The Federal Gift tax will not be repealed, although it will be decreased to 35% under this act.  I know it states that on the IRS web site, but I wanted to find something a little easier to read.

                          http://austin.bizjournals.com/austin/stories/2001/07/23/focus4.html

                          However, imagine if people who stand to inherit tens of millions will plot the demise of a rich relative in 2009.  (the exemption will be $3.5 million maximum then, however.)  It seems silly that for only one year there won't be any estate tax.  Maybe the law will change by then. Most people won't be affected by it anyway.  I mean, how many people will have over $3.5 million when they die? I must be naive, but i always wonder about these laws we pay politicians to write. Maybe Congress should spend more time passing laws about feeding & sheltering the living.

                           

                          "How long does my grandfather have to live, doctor?"

                          "About 6 months."

                          "But it's only April 2009.  If you can do anything to keep him alive & kicking for a few more months, maybe we can work something out."

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                            Amarillo/Austin
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                            Posted: March 18, 2007, 5:57 pm - IP Logged

                            One suggestion is to incorporate your winnings into a Trust, hire your relatives and pay them an income instead of offering it as a gift.  The tax exposure is lower and you can even create an insurance plan and pay for their medical benefits.  I think the tax on straight earnings is lower than the gift tax.  I still believe the government is enslaving us in the name of the corporations.  Isn't that called fascism?  Just wondering.

                            Orangeman                                    Jack-in-the-Box

                              tntea's avatar - Lottery-059.jpg

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                              Posted: March 18, 2007, 6:38 pm - IP Logged

                              I assume you are joking, right?

                              oh yes... Education will get the biggest part..  First education to the parents... Things have to start at home.  My students would not be as slow as they are if the parents were more educated.. Then work with life skills with high school.... Lots of money going there.  Children this day in time are so out of touch with reality..  I would like to see a reality camp for Juniors and Seniors started so they can get prepared for the rude awakening they will soon encounter..

                              My parents would receive credit cards.... bills sent to me.  Their wishes will be realities... Their needs fully met..

                              My children will receive.... and lots to the grandchildren... (If they continue their education... including reality camp... ) My own children will have to go back to school and attend camp too...

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