my aunt wants to help me out financially, but does not want me or herslf to be stuck paying some kind of taxes, is there a creative way we she can give me money without ether one of us getting hit with taxes ?
2006-10-14 04:34:29 · 10 answers · asked by Sharing Life 1 in Business & Finance ➔ Taxes ➔ United States
If it is strictly a cash exchange, there is no record of it. Why do you think many like to deal in cash transactions where possible?
2006-10-14 04:37:51 · answer #1 · answered by WC 7 · 0⤊ 3⤋
IRS Pub 950 is a gold mine of information but if you don't want to wade through it following are a few answers that apply to you. 2006 exclusion amount is $ 12,000; if your aunt is married she can take advantage of gift splitting and she and her husband can each give you 12k for a total of $ 24,000. If she pays tuition or medical bills for you it does not need to be considered under the rules. Above the the 12/24 amount a form 709 has to be filled out. This close to the end of the year you could get 12/24 now and 12/24 in January, too, with no gift tax. Go to IRS.GOV and in publications look at or order Pub 950 which goes into complete detail for you.
2006-10-14 11:55:49 · answer #2 · answered by acmeraven 7 · 0⤊ 0⤋
Depends on how much she wants to give you. She can give you $12,000 this year with no reporting required. Then in 2007, which isn't far away, she could give you another $12,000 and not have to report it. That's $24,000 in the next 3 months.
If she's looking at more than that, she probably has enough money that she has an accountant, at least for her income taxes, and should ask him or her about gift tax requirements.
You, as recipient, wouldn't be responsible for any taxes - she might or might not be, but not if follows the amounts above.
2006-10-14 11:46:08 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
Will she be able to help you out by gifting you less than $12,000 per calendar year? Is it going to be an outright gift of cash with no strings attached (like a REALLY nice Birthday present)? Is there no expectation that you will provide something in return?
If you can answer yes to all three questions you are probably both in the clear. See IRS Pub 950 for full details.
2006-10-14 11:41:29 · answer #4 · answered by skip 6 · 1⤊ 0⤋
I believe the limit is $10,000 under federal tax laws. She could give you $10,000 now and $10,000 on Jan 1, 2007. If she has a husband, he could give you the same.
You need to check the tax laws in your state. Call their Dept. of Revenue.
2006-10-14 23:03:46 · answer #5 · answered by ? 6 · 0⤊ 0⤋
laws change constantly and state and feds have different laws.
usually a living trust for big exchanges
or most gifts aren't taxed while alive..
maybe the tax or penalty because of where its coming from you haven't said..
if its a substantial amount see a CPA or financial planner for creative investing ideas.
2006-10-14 11:39:53 · answer #6 · answered by macdoodle 5 · 0⤊ 1⤋
She got the $$ from somewhere and probably already paid taxes when she got it. If she does not declare it as a gift deduction, you will not show as a recipient for tax purposes. Also the IRS has a specific gift limit set.
Taxes are based on when you receive $$, giving it would reduce taxes for the giver, like charity donations.
Check the web site
http://www.irs.gov/ and
http://search.irs.gov/web/query.html?col=allirs&charset=utf-8&qp=&qs=-Wct%3A%22Internal+Revenue+Manual%22&qc=&qm=0&rf=0&oq=&qt=gifts
2006-10-14 11:48:01 · answer #7 · answered by kate 7 · 0⤊ 2⤋
I don't think you can in the U.S.A., after the celebrity gift thing at the Oscar awards when the I.R.S. wanted to crack down on it.
2006-10-14 11:49:16 · answer #8 · answered by Anonymous · 0⤊ 1⤋
and if you are married your aunt can give you and your wife each $12000
2006-10-14 13:40:12 · answer #9 · answered by Billie 5 · 0⤊ 0⤋
ANYTHING UNDER A MILLLION IS NOT TAXED
2006-10-14 11:39:38 · answer #10 · answered by tomtoride 4 · 0⤊ 2⤋