I recently parted with $10k to help a friend in need and wasn't sure if that could be considered as a gift.If you give money away without expectation of repayment, it's a gift.I've heard very little on gifts and how they relate to taxes but are they a help?No, they are not a help. In fact, they can lead to additional tax owed by the giver, not the recipient. If you give more than $10,000 to a single individual in a single year you are subject to Gift Tax (Form 709). What generally happens is that you file the return and the value of the gift(s) above the $10,000/individual/year level is subtracted from your lifetime Estate Tax exclusion (currently $675K, $1M in 2002). Until you exceed your lifetime exclusion, you don't pay the tax now. Where can I find more information on them, if they exist.See the instructions for Form 709. They should be available at the IRS web site, www.irs.gov.Also, I want to be sure that the other party would not have to pay additional taxes.There are never any taxes due to the receipt of a gift. Of course, any income earned on the gift (interest, dividends, etc.) is taxable.Ira
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. M