2007-09-27 07:18:41 · 8 answers · asked by matador 1 in Business & Finance ➔ Taxes ➔ United States
No, you don't have to pay taxes on the money that you gave him, but you will have to file a gift tax return. You can give up to $12,000 per person per year with no tax consequences. If you exceed that amount you have to file a gift tax return, but you do have a $1,000,000 lifetime exclusion that you can apply the excess above the $12,000 to (in this case $28,000 if you did indeed give him half of the $80,000).
2007-09-27 07:25:36 · answer #1 · answered by Anonymous · 3⤊ 0⤋
Did you give your son a gift of the money, or was it repayment of a loan? Or, was the money a loan to your son?
If it is a loan to your son, it is not a taxable event. When you are repaid, the interest on the loan is taxable in come to you. You must include some interest on the loan, it cannot be interest-free for this much money.
If it is a repayment of a loan, it is not a taxable event to you.
If you gave it as a gift, you must file Form 709 and report the gift. Your lifetime exclusion of $1 million for your gift and estate taxes will be reduced by the amount of your gift. No taxes will be owed until the exclusion is used up.
Form 709 is filed separate from your tax return but is due on the same day as your tax return.
Your state may also require you to file a gift tax return.
2007-09-28 04:08:29 · answer #2 · answered by ninasgramma 7 · 1⤊ 0⤋
Loan proceeds aren't taxable to you. But if you gave your son $40,000 you'll have to file a gift tax return showing that. You won't necessarily owe any gift taxes as long as you haven't given gifts totalling over $1 million in your lifetime.
2007-09-27 07:37:19 · answer #3 · answered by Judy 7 · 4⤊ 0⤋
Don't tell anyone you gave the money as a gift. It is a loan, now if he pays you back or not that is between you and him. Never ever tell people what you are doing with your money.
2007-09-27 08:18:38 · answer #4 · answered by Boomrat 6 · 0⤊ 4⤋
Look its simple, you took out an equity loan on your house. You can do what ever you want with the money. After all you are paying the loan back. Its not income, its a loan.
2007-09-27 07:30:29 · answer #5 · answered by cliff1224 4 · 1⤊ 3⤋
Why would you pay taxes on borrowed money?
2007-09-27 07:22:31 · answer #6 · answered by Anonymous · 1⤊ 3⤋
Yes, or have him pay the taxes since it's in his hand. As far as the government knows, the money went somewhere, and they consider that you have it.
2007-09-27 07:26:21 · answer #7 · answered by perfectlybaked 7 · 0⤊ 6⤋
yes - you're entitled to give 12,000 gift to each person each year - if you are married - you can jointly give 24000 to each person each year - you'll have to pay gift taxes on the excess
2007-09-27 07:21:48 · answer #8 · answered by Anonymous · 0⤊ 6⤋