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re: Friend gave his daughter $275k when she graduated college.
Posted on 1/14/22 at 7:58 am to TigerV
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.
0
Posted on 1/14/22 at 7:58 am to TeddyPadillac
quote:
7k/yr does not equate to $275k unless he more than doubled the money he put in.
Private highschool is much closer to $10-15k and if he truly deposited SMU tuition, well, that’s a frick ton.
This post was edited on 1/14/22 at 8:02 am
Posted on 1/14/22 at 7:59 am to LNCHBOX
BUT, if he saved this via a college education account or Coverdell or 529 or combination of these, he has to be able to show qualifying expenses to do take it out, otherwise you pay tax and penalty.
Posted on 1/14/22 at 7:59 am to nikki6
quote:
Catholic schools cost like $7k a yr now.
Grammar schools run about 5-6k a year and high schools run about 10-12k a year.
This post was edited on 1/14/22 at 8:01 am
Posted on 1/14/22 at 8:01 am to GreatLakesTiger24
quote:
imagine basing where you live on the quality of government schools
Not sure if serious...
Posted on 1/14/22 at 8:01 am to zippyputt
quote:
BUT, if he saved this via a college education account or Coverdell or 529 or combination of these, he has to be able to show qualifying expenses to do take it out, otherwise you pay tax and penalty.
He likely didn't put it in those types of accounts knowing he would be gifting it at a later date.
Posted on 1/14/22 at 8:02 am to CAD703X
quote:$275k is a starter home? Lol. Who is paying over a quarter of a million dollars on a home they’re barely at because they work?
This helps her get a much better starter home
Posted on 1/14/22 at 8:02 am to TeddyPadillac
quote:
$7k/yr does not equate to $275k unless he more than doubled the money he put in.
SMU is 60k a year
Just SMU for 4 years is 240k
This post was edited on 1/14/22 at 8:04 am
Posted on 1/14/22 at 8:03 am to tigergirl10
quote:
$275k is a starter home? Lol. Who is paying over a quarter of a million dollars on a home they’re barely at because they work?
275k where I live is an out house in the woods.
Posted on 1/14/22 at 8:03 am to tigergirl10
quote:
$275k is a starter home? Lol. Who is paying over a quarter of a million dollars on a home they’re barely at because they work?
Haven’t been in the home buying market recently huh?
Posted on 1/14/22 at 8:03 am to nikki6
Your friend seems pretty smart/a good dad. Respect to him.
Posted on 1/14/22 at 8:04 am to tigergirl10
quote:this shtick is worse than you being a woman
$275k is a starter home? Lol. Who is paying over a quarter of a million dollars on a home they’re barely at because they work?
Posted on 1/14/22 at 8:04 am to tigergirl10
quote:
$275k is a starter home? Lol. Who is paying over a quarter of a million dollars on a home they’re barely at because they work?
Pretty much anyone that wants to own instead of rent and lives in or in close proximity to a major metro area
Posted on 1/14/22 at 8:06 am to LSUBoo
quote:
Talk about highlighting the absurd costs of private schools.
Yeah and the Catholic Schools are cheap in comparison.
Posted on 1/14/22 at 8:06 am to Ash Williams
quote:
Maybe CPAs on here can address this, but would he have to pay a gift tax on every dollar over $15k?
You are assuming that he didn’t put his contributions to her annually in a trust.
But that’s moot. If you give more than 15k, it just means you have to report it.
It counts against your lifetime 11 million or so exemption limit. (Which also is the same bucket to avoid inheritance taxes).
So no, he didn’t have to pay taxes on it.
Posted on 1/14/22 at 8:07 am to nikki6
Tell him I need a small low interest loan.
Posted on 1/14/22 at 8:07 am to zippyputt
quote:
BUT, if he saved this via a college education account or Coverdell or 529 or combination of these, he has to be able to show qualifying expenses to do take it out, otherwise you pay tax and penalty.
I haven’t looked in the past year, but the rules for a 529 in the past were that if your kid received scholarship money to college you could withdraw $1 for every $1 of scholly they got.
There’s loopholes for this particular situation.
You can also as said use it for other things related to college expenses. You can also keep it for her grandchildren.
The only tax paid would be on the income earned additionally. The principal remains untaxed I believe outside of maybe a penalty. But there wouldn’t be a penalty in this situation.
Posted on 1/14/22 at 8:09 am to TeddyPadillac
quote:
$7 k/yr does not equate to $275k unless he more than doubled the money he put in.
The money wasn't under a mattress, people, it was invested. The level of financial illiteracy in the general population is astounding.
If you'd invested over the last 20 years (since 2000-2001), achieving an average annual return of 10-12% is not difficult at all, so your money would've doubled approximately 3 times in this ~20 year period. Obviously the math is slightly different if one is investing annually or in lump sums but those returns aren't particularly spectacular for the last 2 decades.
Posted on 1/14/22 at 8:13 am to tigergirl10
quote:you're right. if she lives in a non shithole area that won't cover more than a down payment in a decent neighborhood.
$275k is a starter home? Lol. Who is paying over a quarter of a million dollars on a home they’re barely at because they work?
Sorry you live in poverty, Walt.
Posted on 1/14/22 at 8:16 am to CAD703X
quote:
you're right. if she lives in a non shithole area that won't cover more than a down payment in a decent neighborhood.
Let’s not be hyperbolic.
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