Can I give my 2 children 12K each and then take some out if I need it down the road? Both are under the age of 6. Not sure the exact rules. Thanks!
2007-06-13 07:16:59 · 5 answers · asked by Curt L 1 in Business & Finance ➔ Taxes ➔ United States
**Edit** The reason I'm asking is that I'm going back to school and if the money is in my kids name I don't have to report it to financial aid. I'd like to get as much as possible and then when I graduate use the money to pay off my loans.
2007-06-13 07:48:01 · update #1
BTW ....It's legal. The accounts are in their SSN's. I called FA and they said I didn't have to inlculde it on the form. I quit my job so our family isn't going to have my 45K of income. Wife is part-time and is going to pick up some hours. It will be tight but we can do it. So it's not like I'm some rich guy trying to "scam" the system. Thanks
2007-06-13 09:59:47 · update #2
i would say taking it out or having the power to take it out is not a good idea as it can give you control over the money meaning it is not a gift. It may be best to set up a discretionary trust to put the money in. Get a neutral trustee and you can ask for money from the trust for their benefit if you need to. That way you should be able to get the best of both worlds.
you cant put in it their name and then give it back that is on the borderline of fraud. sorry. i thought they only look at income not how much money u posses for financial aid purposes.
2007-06-13 07:25:01 · answer #1 · answered by ainger452 3 · 0⤊ 0⤋
No you legally cannot take it back for your own benefit. The funds must be used for them only which includes their education. Instead of drawing up a trust which is expensive for these small gifts talk to your banker about custodian bank accounts for them. You can be the custodian but the small print on the new account cards say that you promise to use the money only for them. If you fail to do this your kids can sue you. You can laugh now but when then turn 21 watch out.
2007-06-13 17:24:58 · answer #2 · answered by spicertax 5 · 0⤊ 0⤋
No, you're trying to scam the system by doing something illegal - I don't think that's what you want to do. Plus if you do and get caught, you could end up in major trouble over it.
If you maintain control, meaning you can take it back, then you haven't truly given it away, so it's still yours and would need to show on your FAFSA.
2007-06-13 16:51:24 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
From what I understand the gift exclusion does not apply to Indian givers. Ask your CPA for the exact rules.
2007-06-13 14:54:27 · answer #4 · answered by B . 2 · 0⤊ 0⤋
It is not considered a gift if you have the right to revoke it at any time.
2007-06-13 16:31:23 · answer #5 · answered by D E 2 · 1⤊ 0⤋