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Posted on 1/14/22 at 7:25 am to TigerV
quote:
Great idea, but going to be one hell of a tax bill.
I think the daughter can just basically put this towards her inheritance and deal with it during the succession. You just have to fill out a form.
Posted on 1/14/22 at 7:46 am to TigerV
quote:
Great idea, but going to be one hell of a tax bill. Hope he talked to an accountant about how to do this over the entire time period to reduce the taxes
Care to elaborate?
Unless he and his wife are worth more than $24 million (doesn't sound that way), he doesn't have to worry about estate or gift taxes.
If you're talking about income taxes, if he gifted the underlying stock account that appreciated over time, then sure, she'll have to pay capital gains tax when she takes it out. BUT, had the father not gifted the daughter the account, then he would have had to pay taxes on it and he may be in a higher bracket (without considering the kiddie tax).
If it's just been earning interest all of these years, then the dad has already paid the taxes on that money and he's gifting her the full $275K and there will be no tax due.
So, under any scenario, there will not be "one hell of a tax bill" that results from his gifting his daughter this money.
This post was edited on 1/14/22 at 7:48 am
Posted on 1/14/22 at 7:49 am to TigerV
quote:
Great idea, but going to be one hell of a tax bill.
You can gift $14k or more a year tax free. Assuming the dad is married, they can give their daughter $28k or more combined a year tax free. And it's a lietime thing.
quote:
The gift tax only kicks in after lifetime gifts exceed $11.7 million in 2021
The first thing to know about the federal gift tax is that gift givers—not gift recipients—have to pay it. Thankfully, you won’t owe the tax until you’ve given away more than $11.7 million in cash or other assets during your lifetime. The lifetime exclusion was raised to $11.7 million in 2021.
If you’re married, your spouse is entitled to a separate $11.7 million in 2021. So, actually owing the gift tax is not a concern for most folks. But you may still have to file gift tax returns even though you don’t owe any tax.
Posted on 1/14/22 at 7:58 am to TigerV
quote:
Great idea, but going to be one hell of a tax bill.
The fact that the government thinks it has any right to this money, when it was already taxed when he made it, and will be taxed when she spends it, is an absolute travesty.
Posted on 1/14/22 at 1:40 pm to TigerV
You and spouse can gift over $10mm lifetime dollars to your kid without tax
Posted on 1/14/22 at 2:41 pm to TigerV
quote:you don’t know how things work do you
Great idea, but going to be one hell of a tax bill. Hope he talked to an accountant about how to do this over the entire time period to reduce the taxes
Posted on 1/14/22 at 4:17 pm to TigerV
quote:
Great idea, but going to be one hell of a tax bill. Hope he talked to an accountant about how to do this over the entire time period to reduce the taxes
Don't know if anyone answered this, but it would be based on year. And if he is married, it'd be double. So for 2021, it'd be up to 30k if he files mfj, as the IRS would assume 15k from father and 15k from mother
Since the account was in her name, she legally had access to it at any point (if she found out about it and went to the back, they would give her access), so the gifts would be at the time deposited. Likely no gift tax
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