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Author: angelbuggy Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: GIFT EXEMPTION IN THE 9TH HOUR Date: 4/18/2000 1:28 AM
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I GUESS I DONT UNDERSTAND THE GIFT EXEMPTION. I SEE THAT THE USER DOESNT HAVE TO PAY TAX ON ANYTHING UNDER 10k, BUT WHAT IS THE BENEFIT TO THE GIVER.

Others addressed the medical payments for your mother, but I didn't see anyone answer this part of your question from a tax standpoint.

There IS an advantage to the giver if the giver has enough assets that estate tax will be due upon their death. In 2000, that amount is $675,000. By shifting as much money out of their estate as possible before death, they lower the amount subject to estate taxes. A married couple can give away $20,000 per year jointly ($10,000 if single) to as many individuals as they want. Many older persons will significant assets can shift quite a bit out of their estates through such gifts.

So while it's true that there is no immediate benefit to the donor in terms of a tax deduction at the time the gift is made, the cumulative benefit is realized when they die and they have less taxable assets.

Anglebuggy, E.A.

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