gift for her retirement image
Huy T
Dad wants to give me $20k to help me buy a house. He wants to avoid filling out a gift tax return (and paying the taxes). Can he gift 3 of my siblings $5k each, and those 3 siblings in turn right me a check for $5k (gift) to me? Everyone is technically under the $14k gift exclusion for the year but ultimately I will be the one with all $20k
update: I thought he has to file a gift return for anything over 14k? In the case above, where he gives 4 kids 5k and 3 of those kids in turn give it to one brother to pull their money together to buy a house. Is there anything illegal about that? and does it require any gift tax forms?
Answer
The current gift-tax exemption is $5.25 million. Taxable gifts simply chip away at the lifetime exemption. The annual gift-tax exclusion you refer to is $14k for 2013. This is the annual amount that can be gifted without chipping away at the lifetime exemption.
Your example. If your dad gave you $20k for a house, a portion of it - 14k - would qualify for the annual gift tax exclusion, leaving a "taxable" gift of 6k. The 6k, then, would chip away at his remaining lifetime exemption. Assuming he made no other taxable gifts during his lifetime, his remaining exemption would be $5,244,000 ($5,250,000 minus $6,000). NO taxes would be due.
Hope my answer was clear and earns your Best Answer vote!
DISCLAIMER FOR PROFESSIONALS: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.
Retirement Guru, CFP®, EA, CES, CFS, AAMS
Certified Financial Planner⢠Practitioner
Enrolled Agent | Admitted to Practice before the IRS
Certified Estate and Trust Specialist
'Providing sound Retirement and Estate Planning Strategies since 1985'
The current gift-tax exemption is $5.25 million. Taxable gifts simply chip away at the lifetime exemption. The annual gift-tax exclusion you refer to is $14k for 2013. This is the annual amount that can be gifted without chipping away at the lifetime exemption.
Your example. If your dad gave you $20k for a house, a portion of it - 14k - would qualify for the annual gift tax exclusion, leaving a "taxable" gift of 6k. The 6k, then, would chip away at his remaining lifetime exemption. Assuming he made no other taxable gifts during his lifetime, his remaining exemption would be $5,244,000 ($5,250,000 minus $6,000). NO taxes would be due.
Hope my answer was clear and earns your Best Answer vote!
DISCLAIMER FOR PROFESSIONALS: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.
Retirement Guru, CFP®, EA, CES, CFS, AAMS
Certified Financial Planner⢠Practitioner
Enrolled Agent | Admitted to Practice before the IRS
Certified Estate and Trust Specialist
'Providing sound Retirement and Estate Planning Strategies since 1985'
Any ideas for a retirement gift for a musician?
Mithril Ka
A co-worker is retiring in a month. We are in a non-musical related field. However, music is her first passion and in her retirement years, she is looking forward to getting back in touch with the music aspect of her life. She's a brilliant piano player and has a master's degree in pipe organ performance. Any suggestions on a retirement gift that some other fellow co-workers and I could get for her? I thought it would be good for the gift to be music related since she's looking forward to re-engaging with something she's held off for awhile.
Answer
flowers and a music book
flowers and a music book
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