Message Font: Serif | Sans-Serif
No. of Recommendations: 0
My parents sold their farm last year and gave it to my three sisters and me via an investment account. We each got $110K in separate accounts. In turn, we each pay them $7K per year to live on.

1. Do we pay dividends and capital gains on this account as a non-retirement account (about $9.5K this for 06)?
2. Is the $7K payment deductible for me?
3. Is the $7K payment taxable for my parents?

I am getting conflicting comments from my parents tax person. He says to treat it as a retirement account and pay taxes only on money as it is removed from the account.

Any info is appreciated
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.