How does one accomplish this? What is the procedure? My MIL would like to gift $10,000 each to some individuals.Once that person has it, I assume any investment gains they will be responsible for as the cost basis is at gift date?
Is this the same person from the previous post?1. I need to invest her money to ensure minimal risk of principal.2. We are looking at like $65,000. This is it, all she has, only SS comes in monthly and a small pension.3. She needs a $700 payout monthly, for expenses she has.I'd say she can't afford to make the gifts and should keep it for her own needs.
Nope, I meant GMIL (wife's granny) And yes, MIL will get a gift.
This might help a little.http://www.marketwatch.com/story/how-to-avoid-the-irs-gift-t...http://money.cnn.com/magazines/moneymag/money101/lesson21/in...If its cash, its as simple as writing a check or doling out the Benjamins. If its some other asset (stocks, property, etc.) its a matter of transferring deed/ownership/etc. The gift tax limit is now $13,000 per person. However, if MIL AND spouse want to give more to a person, they can each give 13k so total is 26k. Or if this is for a person in college a one time gift of 65k (130k with spouse) is treated as 13k for 5 years.JLC
Once that person has it, I assume any investment gains they will be responsible for as the cost basis is at gift date? That is not correct.If the gift is something other than cash, the donor's tax basis will transfer to the recipient. So the recipient takes over the basis from the donor, and will be responsible for paying the tax on any gain while the donor held the property.However, if the FMV of the gift is less than the basis (i.e., the donor suffered a loss before donating), then the FMV becomes the basis for purposes of calculating a loss. For purposes of calculating gains, the recipient's basis will still be the donor's basis. The idea here is that you can't transfer a loss on a property by making a gift of the property.Choosing to make a gift of highly appreciated or depreciated property is something that must be done carefully.In any case, the gift tax issues (not income tax, but gift tax) are all based on the FMV of the property.--Peter
Thanks, it will be cash so no worries in basis.
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