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Cant you just give cash to avoid the gift taxes on the receipients??

Topic closed. 14 replies. Last post 4 years ago by billionaire2bee.

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United States
Member #130815
July 25, 2012
1636 Posts
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Posted: May 21, 2013, 11:30 am - IP Logged

So if you hit the jackpot and want to give friends and family some money...can't you just give them cash so they wont have to pay the gift taxes? Like if I had of won one of the past two jackpots, I would have just got maybe a million in cash and handed out different amounts to friends and distant family....Would they be exempt from the taxes then???

    rdgrnr's avatar - walt
    Way back up in them dadgum hills, son!
    United States
    Member #73904
    April 28, 2009
    14903 Posts
    Offline
    Posted: May 21, 2013, 12:01 pm - IP Logged

    The IRS probably won't bother you unless you're on the President's Enemies List.

    Like me.

      Saylorgirl's avatar - Lottery-065.jpg
      Indiana
      United States
      Member #129225
      June 13, 2012
      546 Posts
      Offline
      Posted: May 21, 2013, 12:44 pm - IP Logged

      So if you hit the jackpot and want to give friends and family some money...can't you just give them cash so they wont have to pay the gift taxes? Like if I had of won one of the past two jackpots, I would have just got maybe a million in cash and handed out different amounts to friends and distant family....Would they be exempt from the taxes then???

      It just depends on how they spend the cash you would give them.  If all of a sudden they are putting a large amount of cash in the bank or on a brand new car it could be a problem.  Anything over $10,000 in cash being deposited is reported to the government.

        Avatar
        London
        United Kingdom
        Member #140684
        March 24, 2013
        566 Posts
        Offline
        Posted: May 21, 2013, 12:47 pm - IP Logged

        A man in the UK hit the jackpot and then told the lottery that he was a family syndicate to avoid the taxes on gifting.

        2016 Won/Lost

        EuroMillions / Spent: £22 / Won £0 / Total -£22

        UK Lotto / Spent: £4 / Won: £0 / Total: -£4

        2016 Total: -£24

        Jan: -£22 Feb: £0 ~ Mar: £0 ~ April: £0 ~ May: £0 ~ June: £0 ~ July: £2

         

        EuroMillions = £2 Line / Played: x11 [old price] 

        EuroMillions = £2.50 Line / Played: x0

        UK Lotto = £2 Line / Played x2

          savagegoose's avatar - ProfilePho
          adelaide sa
          Australia
          Member #37136
          April 11, 2006
          3300 Posts
          Offline
          Posted: May 21, 2013, 5:25 pm - IP Logged

          tjhe tax office will notce $1 million turning up in peoples bank accounts.  nothing to say you cant employ them and hand over an expense account, with  saya  credit card that gets topped up ea month.

          2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

          keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

            Avatar
            Toronto
            Canada
            Member #138397
            January 26, 2013
            179 Posts
            Offline
            Posted: May 21, 2013, 6:06 pm - IP Logged

            My question is, why would you give millions of dollars away? I mean if you're giving away a few thousand, there's no problem. You aren't taxed anyway.

            The tax is only a problem when you're giving away huge amounts. But why would you give away huge amounts in the first place? 

             

            It's not like I'm so greedy I won't even give my parents money. No. But the thing is, if lottery winners need so much financial and legal advice with their

            windfall, wouldn't people who received millions from lottery winners need it as well? It will take a lot of time and effort to learn and understand the complex

            financial and legal consequences and responsibilities, as well as how to invest the money properly while making a decent, and safe gain that fits your own 

            needs. 

             

            Not everyone is cut out to become a financial expert. Or even learn to manage their own finances well. 

             

            If I had a really close-knit group of people (family, friends, w/e) whom I share a mutual trust with, there would be no need to just "give" them money. Instead,

            it would make more sense to have a single or two people burden the responsibilities of the huge amount of money, taking the time to learn to manage it 

            instead of hiring dozens of financial adviors each nimbling away at the money for no good reason.

             

            If for example, they wanted a house, you could simply buy it and let them live in it. Because of the trust you share, it shouldn't be a problem that it's under

            your name and not theirs. In fact, if I were really to win a 50million+ jackpot hard cash (since canada doesn't have tax on lottery winnings, and no annuities)

            I'd buy a huge plot of land so that my closest family can all build their dream homes there and we all could live together. Then any money they need, you can

            easily give for example buying groceries together and you pay, etc. 

             

            That's how I feel, but I might be too naive.

              savagegoose's avatar - ProfilePho
              adelaide sa
              Australia
              Member #37136
              April 11, 2006
              3300 Posts
              Offline
              Posted: May 21, 2013, 6:15 pm - IP Logged

              but you may find they need more and more money.  id prob give ones i cared about a credit card with a monthly loading. and terll them dont ovver draw it or it gets cancelled. and wont be renewed for 3 years. that way they could hang around, and not be bugging me to buy stuff fo them all the time.

              2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

              keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

                Avatar
                Toronto
                Canada
                Member #138397
                January 26, 2013
                179 Posts
                Offline
                Posted: May 21, 2013, 6:28 pm - IP Logged

                but you may find they need more and more money.  id prob give ones i cared about a credit card with a monthly loading. and terll them dont ovver draw it or it gets cancelled. and wont be renewed for 3 years. that way they could hang around, and not be bugging me to buy stuff fo them all the time.

                Maybe I'm just very fortunate. But none of my close family (parents, grandparents, aunts and uncles) would act like that. Some of them are quite well off

                already, and they don't spend like there's no tommorrow. 

                 

                But if I had a close family member who can't control their spending, I would DEFINITELY NOT give them a cent to allow them to indulge in their bad spending

                habits. I wouldn't support anyone's gambling or drug addictions. Giving them the money is tempting them to do wrong, I would never do that.

                  Avatar
                  Inland Empire
                  United States
                  Member #118116
                  October 22, 2011
                  317 Posts
                  Offline
                  Posted: May 21, 2013, 7:37 pm - IP Logged

                   So what's the actual percentage of tax for the jackpot in CA? There's no state tax but I don't know where this 35% tax thing came from.


                    United States
                    Member #130815
                    July 25, 2012
                    1636 Posts
                    Offline
                    Posted: May 21, 2013, 8:02 pm - IP Logged

                    My question is, why would you give millions of dollars away? I mean if you're giving away a few thousand, there's no problem. You aren't taxed anyway.

                    The tax is only a problem when you're giving away huge amounts. But why would you give away huge amounts in the first place? 

                     

                    It's not like I'm so greedy I won't even give my parents money. No. But the thing is, if lottery winners need so much financial and legal advice with their

                    windfall, wouldn't people who received millions from lottery winners need it as well? It will take a lot of time and effort to learn and understand the complex

                    financial and legal consequences and responsibilities, as well as how to invest the money properly while making a decent, and safe gain that fits your own 

                    needs. 

                     

                    Not everyone is cut out to become a financial expert. Or even learn to manage their own finances well. 

                     

                    If I had a really close-knit group of people (family, friends, w/e) whom I share a mutual trust with, there would be no need to just "give" them money. Instead,

                    it would make more sense to have a single or two people burden the responsibilities of the huge amount of money, taking the time to learn to manage it 

                    instead of hiring dozens of financial adviors each nimbling away at the money for no good reason.

                     

                    If for example, they wanted a house, you could simply buy it and let them live in it. Because of the trust you share, it shouldn't be a problem that it's under

                    your name and not theirs. In fact, if I were really to win a 50million+ jackpot hard cash (since canada doesn't have tax on lottery winnings, and no annuities)

                    I'd buy a huge plot of land so that my closest family can all build their dream homes there and we all could live together. Then any money they need, you can

                    easily give for example buying groceries together and you pay, etc. 

                     

                    That's how I feel, but I might be too naive.

                    Wait wait wait back up and re-read what I actually said LOL...I said I'd take out a miilion in cash and distribute different ammounts...Im not giving away or rather wouldnt if I have it to give millions LOL

                      PlayToWin47's avatar - Lottery-041.jpg
                      Joplin MO
                      United States
                      Member #138489
                      January 28, 2013
                      190 Posts
                      Offline
                      Posted: May 21, 2013, 10:50 pm - IP Logged

                      So if you hit the jackpot and want to give friends and family some money...can't you just give them cash so they wont have to pay the gift taxes? Like if I had of won one of the past two jackpots, I would have just got maybe a million in cash and handed out different amounts to friends and distant family....Would they be exempt from the taxes then???

                      It would be hard to say.  It depends on how closely the IRS watches you.

                      Technically, by law, they're not exempt from the gift tax.  If you're giving cash to them ... once you have given $14,000 (as of Jan. 2013) per person, anything over that is subject to the gift tax ... paid by you!  If you gave it to them under the table, and they didn't go doing things that could be tracked ... like buying cars/etc., putting it in the bank, etc. ... AND if the IRS wasn't watching close enough, you MIGHT get away with it.

                        joshuacloak's avatar - Money Swim-uncle-scrooge-mcduck-35997717-677-518.jpg

                        United States
                        Member #32537
                        February 12, 2006
                        698 Posts
                        Offline
                        Posted: May 21, 2013, 11:33 pm - IP Logged

                        its called a trust

                        trust trust trust trust

                        if u won pb/mm levels of money

                        a lawyer can set it up/claim it for 

                        and if irs ever ask's why your best friend just had 2 million dropped into hes bank account

                        show them trust, with hes name on it

                        issue fixed, gift taxes bypassed

                         

                        gift taxes are wrong, just like death tax is

                        i have right to give everthing i have to whoever i want, whenever i want, without a other human being coming in middle of me and whoever am giving it too

                        even more so do i have the right to give stuff to my kids, but not to IRS, the kids get anything that amounts to millions

                        and here comes there hand, 

                        the evil tax the rich folks have got what they always wanted, to steal money form parents trying to give there kids the money they spent a lifetime earning to pass on to kids/grandkids

                         

                        what irs does and govt does is very WRONG, and anyone who supports what they do is scum of the earth

                        the fact is govt got its taxes paid first time u claimed the money/or earned the money in a job etc

                        u have ever right to give it away tax free, its already been taxed

                        anyone who thinks gift tax or death tax is okay, can go burn in hell , 

                         

                        lucky its easy as hell to give people things in more creative ways

                        u know them show's where they remodel your house for u

                        they get around gift tax laws easy

                        they "rent" your home, and if renter happens to make house better/add's to its value, its not taxed

                        for lottery winners, just write a freaking trust, have trust claim the money

                        however many names u want on it, how much they would or "can" get in future

                        u can write it however u wish

                        this is like 50th gift tax topic i seen

                        why do i people not research this

                        its simple, if u  win large jackpot

                        step 1, go to lawyer,  google search for best ones in your area, think a little bit on this HARD

                        step 2, tell lawyer what u want to do and why

                        step 3, allow lawyer to freaking handle this

                        any lawyer worth hes cost will set up a trust or something like it

                        that allow u to give however much money U WANT to however u want, gift tax free

                        its already been taxed first time, why play the greedy people more , and get double taxed

                        for god sakes people wake up and use your brain's

                        No bees, no honey.

                          HoLeeKau's avatar - YheaShea
                          Idaho
                          United States
                          Member #94283
                          July 17, 2010
                          2284 Posts
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                          Posted: May 21, 2013, 11:35 pm - IP Logged

                          It would be hard to say.  It depends on how closely the IRS watches you.

                          Technically, by law, they're not exempt from the gift tax.  If you're giving cash to them ... once you have given $14,000 (as of Jan. 2013) per person, anything over that is subject to the gift tax ... paid by you!  If you gave it to them under the table, and they didn't go doing things that could be tracked ... like buying cars/etc., putting it in the bank, etc. ... AND if the IRS wasn't watching close enough, you MIGHT get away with it.

                          Until one of them gets mad because you're not forking over enough money, or gets mad for other reasons and turns you into the IRS. 

                          I believe it's the giver's responsibility to pay the gift tax, so you'd be the one in the pokey.

                            dager's avatar - vampireteeth100x98
                            New Member
                            New Orleans
                            United States
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                            May 29, 2013
                            36 Posts
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                            Posted: May 30, 2013, 11:20 am - IP Logged

                            The way the bank watches you is another issue aside from the IRS.  The banks don't want to get cited for internal compliance shortcomings.  They probably have enough dirty business of their own to cover up without having to worry about their clients.

                            Some banks start an investigation on their own, and report to the IRS if they start seeing strange (for your account) deposits or withdrawals.  If you don't typically have $50,000,000 in the bank and make regular large withdrawals and you suddenly win a lottery you'll most likely be flagged and watched to see how much cash your withdrawing on a regular basis.  They know people want to avoid taxes, and they don't want to be cited in an audit.

                            Say you want to give someone $60,000 you obviously can't write a check to them without dealing with taxes, but even if you start withdrawing $5000 a month to add up to 60,000 at the end of the year it might still look suspicious if it isn't part of your regular spending habits.  Even further than that the person you're giving the money too would have to keep it as cash and never deposit it into any financial institution that reports to the IRS.


                              United States
                              Member #130815
                              July 25, 2012
                              1636 Posts
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                              Posted: May 30, 2013, 11:38 am - IP Logged

                              The way the bank watches you is another issue aside from the IRS.  The banks don't want to get cited for internal compliance shortcomings.  They probably have enough dirty business of their own to cover up without having to worry about their clients.

                              Some banks start an investigation on their own, and report to the IRS if they start seeing strange (for your account) deposits or withdrawals.  If you don't typically have $50,000,000 in the bank and make regular large withdrawals and you suddenly win a lottery you'll most likely be flagged and watched to see how much cash your withdrawing on a regular basis.  They know people want to avoid taxes, and they don't want to be cited in an audit.

                              Say you want to give someone $60,000 you obviously can't write a check to them without dealing with taxes, but even if you start withdrawing $5000 a month to add up to 60,000 at the end of the year it might still look suspicious if it isn't part of your regular spending habits.  Even further than that the person you're giving the money too would have to keep it as cash and never deposit it into any financial institution that reports to the IRS.

                              Also depends on how big of account you have....banks rarely want to piss off big account holders...whatever the compliances rules are...