Joely
So earlier today, my mum bought me a $50 Visa Gift card, and i registered the card on giftcardmall.com/visagift, blah blah; and so then i went to try and make a purchase online, but it said there was an error.
What do i need to do to make the card valid for purchasing online?
Answer
It usually takes a day or two for the information with the gift visa to be updated officially. That's one of the only drawbacks with gift card purchasing online. The online company processing the purchase is required to verify the card, the owner of the card, and the address of the owner of the card. I would try to call the gift card company and make sure that #1 the card was activated, and #2 that your information is updated in the online system.
It usually takes a day or two for the information with the gift visa to be updated officially. That's one of the only drawbacks with gift card purchasing online. The online company processing the purchase is required to verify the card, the owner of the card, and the address of the owner of the card. I would try to call the gift card company and make sure that #1 the card was activated, and #2 that your information is updated in the online system.
How do I gift 50 thousand dollars to my daughter without having a tax problem?
santosias
Due to the laziness of an estate lawyer, all the money(about 200 thousand) from a medical malpractice case is coming in a check to me personally. I originally wanted my daughter to receive 50 thousand of the amount and my grandaughter to receive 25 thousand. How do I open an investment account for them without having to pay taxes?
Answer
The easiest solution is to open an account for each and deposit $12,000 in each account per year until it gets up to where you want it to be. Then, you won't have to worry about filing any extra tax returns. If you are married, you can deposit up to $24,000 per year in each person's account.
HOWEVER, if this is unacceptable, then you have two other options.
Option 1 - give each person $12,000 (or $24,000 if you are married) and then give a different relative (trusted sibling?) $12,000 (or $24,000 if you are married) and instruct the sibling to give the money to the intended party. This 3rd party will have to be very trustworthy. The IRS frowns on this method as it "goes around" their gift laws, so even though it is commonly done, I don't recommend it.
Option 2 - Give the total amount to each person now. You will have to file a form 709 "Gift Tax Return" (see link below). It is not exactly simple, but at least it will NOT cause tax due. The first $1,000,000 of gifts you give in your lifetime (that are over $12,000 if you are single and $24,000 if you are married) will not trigger a tax.
If you are single, your 'gift tax amount' will be $38,000 ($50,000-$12,000) for your daughter and $13,000 ($25,000-$12,000) for your granddaughter for a total of $51,000 which is substantially below the $1,000,000 limit. This means you can still give $949,000 for the rest of your life without triggering any gift taxes.
If you are married, you will incur $26,000 ($50,000-$24,000) plus $1,000 ($25,000-$24,000) or a total of $27,000. Better yet, just give your granddaughter $24,000 and the last $1,000 next year.
Keep in mind that any amount on a gift tax return will lower your estate threshhold. Meaning, if the threshold for estate tax is $2,000,000 when you die (it changes almost every year), the first $2,000,000 of estate value will not trigger the estate tax. However, if your lifetime gift tax is $100,000, then the threshold drops to $1,900,000.
The easiest solution is to open an account for each and deposit $12,000 in each account per year until it gets up to where you want it to be. Then, you won't have to worry about filing any extra tax returns. If you are married, you can deposit up to $24,000 per year in each person's account.
HOWEVER, if this is unacceptable, then you have two other options.
Option 1 - give each person $12,000 (or $24,000 if you are married) and then give a different relative (trusted sibling?) $12,000 (or $24,000 if you are married) and instruct the sibling to give the money to the intended party. This 3rd party will have to be very trustworthy. The IRS frowns on this method as it "goes around" their gift laws, so even though it is commonly done, I don't recommend it.
Option 2 - Give the total amount to each person now. You will have to file a form 709 "Gift Tax Return" (see link below). It is not exactly simple, but at least it will NOT cause tax due. The first $1,000,000 of gifts you give in your lifetime (that are over $12,000 if you are single and $24,000 if you are married) will not trigger a tax.
If you are single, your 'gift tax amount' will be $38,000 ($50,000-$12,000) for your daughter and $13,000 ($25,000-$12,000) for your granddaughter for a total of $51,000 which is substantially below the $1,000,000 limit. This means you can still give $949,000 for the rest of your life without triggering any gift taxes.
If you are married, you will incur $26,000 ($50,000-$24,000) plus $1,000 ($25,000-$24,000) or a total of $27,000. Better yet, just give your granddaughter $24,000 and the last $1,000 next year.
Keep in mind that any amount on a gift tax return will lower your estate threshhold. Meaning, if the threshold for estate tax is $2,000,000 when you die (it changes almost every year), the first $2,000,000 of estate value will not trigger the estate tax. However, if your lifetime gift tax is $100,000, then the threshold drops to $1,900,000.
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