Parents Tax Question?

Question

My dad has just moved into a senior home and I was covering his costs for a couple of months. My mom passed a way while the house was in escrow.
He received the proceeds from the house sale and deposited it in his bank.
Can he just write me a check for the costs of everything I've covered for the last year? Rent, moving costs, etc... less than 20K.
My name is also on the account that the money was deposited into so I could just write a check to myself.
Any problems with this?
Thanks

The amount is $230,000.
The only reason I'm thinking of annuities is the fact that the money would be sheltered from Medi-cal, or so I'm told.
Thanks for all the feedback!!

Answer 1

gift amount per year is $12,000 not 11,000. It was $11,000 till 2005, but for 2006 & 2007 is $12,000 per year. But in this case, you are just reimbursing yourself for your costs, which should be no problem.

Answer 2

The questions have been answered I think it sounds good to us.

*****Bad girl Nina. If you are married then no tax probs on house sales less than 500k in profit. Single cut in half. Remember also has to be primary res and have to have lived in it for so long etceterundo. I saw some cases many where people did not meet*****

I see no problems either. Not really a gift. I mean you paid the expenses and he is competent why not. True in an estate issue or otherwise, legal probs, as one said might be issue if write yourself etc. At least sig anyway. Then again why would it end in such. Don't sound like a prob to me and ps: very nice of you to help your father out that is a lot of money to shell out wondering if going to get back etc. etc. probate sucks.

Wayne Barney
President
BC Business Services, Inc.
Http://www.bcbsinc.com

Answer 3

There are no problems. Have him write the check if possible, and put a notation "reimbursement" or something like that. it is not a gift, no gift tax return is required.

Assuming the proceeds of the house were under $500,000 and you were not an owner, you have no tax issues.

Answer 4

I would have your father sign the check. Even though the account is in joint names with you and you could take money any time you want you could run afoul of the gift tax. By having him sign the check it does not look like a gift to you.

Answer 5

If you're asking for tax purposes, I believe that none of these transactions have created a profit for you, so just get your money back. I would not write the check. It will seem much cleaner to an outsider if the check is from your father.

God bless you for taking care of your dad.

Answer 6

You could legally write the check to yourself, but it would be better if your dad did, in case there's ever any question about it. He should write "reimbursement" in the memo field, and you should keep a list of what it was for.

Answer 7

Your dad can gift you up to $11,000 per year with no tax consequences to you. Reimburse yourself the first $11,000 in 2007 and wait until 2008 to reimburse yourself any amount over the $11,000 that he still owes you. This way you will not have to pay taxes on the income.

This is not an uncommon situation at all where a guardian pays for things out of their own pocket for the ward and then the ward's estate reimburses the guardian when possible. Be sure to keep any receipts so that no one can question what you did and didn't pay on your parents' behalf.

Answer 8

other than the issue that the money is your father's. If he approves of this disbursement there are no problems. Tax wise there will be no issues unless you claimed a deduction for any of the expenses. I would have him sign the check.

Answer 9

It's your dads money! you cant take any away from him!

thats bad!

wait till he dies!