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Posted by NadCixelsyd on August 26, 2008, 4:57 pm
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As I approach my sixties, it's time to give some $$$ to my children.
All my children are adults and not my dependants. I want to keep it
under $12k per year (each, from my wife and me) to avoid filing. I'm
looking for creative ways to avoid using my unified credit.
One child wants to go to medical school. I know that if I pay the
school directly, that doesn't count as a gift to the child. (That
pretty much shoots her inheritance)
If I decide to throw a $22000 party and invite guests chosen by my
daughter, and, by coincidence, my daughter happens to get married just
before the party starts, is that my party or hers?
If my son wants to buy a house, can I purchase an equity interest
which would be forgiven if/when I die? In lieu of cash, can I give my
son $12000 in equity (at FMV) each year until he owns it all?
If I take all my children on a vacation to Hawaii, is that a gift?
It's for my benefit as well as theirs. If I had given them cash, they
probably would not have used it on a vacation.
--
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Posted by Phil Marti on August 26, 2008, 5:27 pm
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"NadCixelsyd" wrote:
> As I approach my sixties, it's time to give some $$$ to my children.
It's your money, but....
Given my experience with my late parents, who went through assets like
Sherman through Georgia in their final years, make sure that you keep what
you and your spouse will need before your dirt naps. Long-term care is
frightfully expensive.
> All my children are adults and not my dependants. I want to keep it
> under $12k per year (each, from my wife and me) to avoid filing. I'm
> looking for creative ways to avoid using my unified credit.
>
> One child wants to go to medical school. I know that if I pay the
> school directly, that doesn't count as a gift to the child. (That
> pretty much shoots her inheritance)
Correct, but IIRC the exception applies only to tuition.
> If I decide to throw a $22000 party and invite guests chosen by my
> daughter, and, by coincidence, my daughter happens to get married just
> before the party starts, is that my party or hers?
You can't be that much younger than I, so dig into your memory of the past,
when the bride's parents gave the party. What you describe isn't creative,
it's traditional, and it's your party. (Spending $22,000 when cake, nuts,
mints, punch, coffee and tea in the church parlor after the ceremony will do
nicely brings us back to "it's your money.")
> If my son wants to buy a house, can I purchase an equity interest
> which would be forgiven if/when I die? In lieu of cash, can I give my
> son $12000 in equity (at FMV) each year until he owns it all?
If they've printed a book "Estate Planning for Dummies" they got their
target audience described perfectly. This is not a DIY project, and there
are horror stories aplenty of people who tried to save a few bucks and wound
up with a mess. Yes, there are many creative schemes for avoiding estate
tax. Pay some money for professional help.
> If I take all my children on a vacation to Hawaii, is that a gift?
Yes.
--
Phil Marti
Clarksburg, MD
--
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2007) - All rights reserved. >>
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Posted by Seth on August 26, 2008, 7:17 pm
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>"NadCixelsyd" wrote:
>> One child wants to go to medical school. I know that if I pay the
>> school directly, that doesn't count as a gift to the child. (That
>> pretty much shoots her inheritance)
>
>Correct, but IIRC the exception applies only to tuition.
Medical bills too, I thought.
>> If my son wants to buy a house, can I purchase an equity interest
>> which would be forgiven if/when I die?
Maybe; depends on the terms of the forgiveness.
>> In lieu of cash, can I give my
>> son $12000 in equity (at FMV) each year until he owns it all?
Yes. But you'll need an appraisal every year.
> Pay some money for professional help.
Well worth it.
>> If I take all my children on a vacation to Hawaii, is that a gift?
>
>Yes.
Maybe. For whose benefit are they travelling?
Seth
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Gil Faver on August 26, 2008, 8:00 pm
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>>"NadCixelsyd" wrote:
>
>>> One child wants to go to medical school. I know that if I pay the
>>> school directly, that doesn't count as a gift to the child. (That
>>> pretty much shoots her inheritance)
>>
>>Correct, but IIRC the exception applies only to tuition.
>
> Medical bills too, I thought.
>
>>> If my son wants to buy a house, can I purchase an equity interest
>>> which would be forgiven if/when I die?
>
> Maybe; depends on the terms of the forgiveness.
>
>>> In lieu of cash, can I give my
>>> son $12000 in equity (at FMV) each year until he owns it all?
>
> Yes. But you'll need an appraisal every year.
every other year. Get an appraisal in December, and make that year's gift
in December, and the following year's gift in January.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Dick Adams on August 26, 2008, 10:58 pm
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> "NadCixelsyd" wrote:
>
>> As I approach my sixties, it's time to give some $$$
>> to my children.
> It's your money, but....
>
> Given my experience with my late parents, who went through
> assets like Sherman through Georgia in their final years,
> make sure that you keep what you and your spouse will need
> before your dirt naps. Long-term care is frightfully expensive.
Very good advice.
As you approach your sixties is NOT the time to be
unloading your assets upon your children unless you
have a few million - in which case I am available
for adoption.
My father had a disabling heart attack at 60 and
died at 86. My mother is still going strong at
88 - spending my inheritance. ;)
I know a man who unloaded over $2 million on his
children through the 90's, lost a lot more than
that in the dot-com-bust, and is now 68, in
perfect health, and hasn't taken a vacation in
the last two years because he is watching his
money.
Dick
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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