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In my prior comment, I think of allowances on an annual basis like most people and not some lifetime amount.
Well, I think we all do. For now the annual non-taxable is $18K. But lifetime comes into play in this situation. I’m glad you made your post, however, because it caused me to revisit this topic and all details in this transactions should be combed through!
Well, I think we all do. For now the annual non-taxable is $18K. But lifetime comes into play in this situation. I’m glad you made your post, however, because it caused me to revisit this topic and all details in this transactions should be combed through!
Thank you for your clarification. I now understand what you were saying.
In my prior comment, I think of allowances on an annual basis like most people and not some lifetime amount.
Only a very small percentage of taxpayers will do that or need to worry about such things.
On the contrary, I think that most people interested in gifting, and keeping in mind the annual gift exclusion amount would be better served if they understood the very large size of the unified credit. Too many people focus on the annual exclusion, and structuring gifts to fall within that amount, when in actuality, they can exceed it, even greatly exclude it, and face no tax consequences.
The total of the unified credit should always be kept in mind.
It sounds like you mean this as an outright gift--and a sizable one at that--and not a loan. I'm sure that you've thought about it, but you should still weigh carefully whether you might need these funds for your own care down the road. You wouldn't need to receive payments...and a lien on the house could provide a measure of protection if circumstances change regarding the home ownership. Again, legal counsel is in order.
1 person can "gift" to another person, $17,000 this year, before it becomes a taxable event.
Get to know the tax code better! The real fact
A person can gift another person $18K this year before it becomes a reportable event.
A person can gift anther person $13.6M (million) in a lifetime before it becomes a taxable event. However anything over $18K in a year is reportable. So if giving more, simply file form 709, but that doesn’t mean taxes are due until 13.6M is gifted.
In this case, I must do form 709 unless I put the property in my trust name and leave it to my son. It still won’t be a taxable event.
Lots of ways to work gifting to avoid reportable events in most cases:
*When she graduated, I bought my granddaughter a car for $30K, gave her $15K and her mom $15K and each gave the dealership their share to make the purchase.
*I directly paid $25K a year for a grandchild’s private school. No gifting considered at all. I just paid the bill.
Last edited by WorldKlas; 04-06-2024 at 07:35 AM..
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