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adult dependent and minor gift tax

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L

LCM

Guest
What is the name of your state? I live in Indiana.

I am 41 years old and have a minor daughter. My mother is supporting us for a few years so I can stay home with my daughter while she is young. We live in separate residences. Can she claim my daughter and me as dependents? Also, can she gift my minor daughter $11,000.00 without paying gift tax? My Mother is under the impression that since my daughter is a minor something special like a trust or special bank account would have to be set up. Thanks.
 


abezon

Senior Member
Yes, she can claim you both (if your income was below $3,000 for the year). She can give your daughter $11,000 with no tax consequences. However, she will have to comply with the uniform transfer to minors act. Her financial advisor can help her do this. She could just put the money into a section 529 plan -- it stays in her control & is not taxable to the child if the money is used to pay for college. Again, the financial advisor can help pick a plan.
 
L

LCM

Guest
gift to minor used as living expenses

Thank you for your reply. So if I understand you correctly...my Mother cannot gift my daughter the $11,000.00 (the maximum without my Mother paying gift tax) and I can put it in a bank account to use as living expenses for us? It must be done as you explained above?
 

abezon

Senior Member
To give $$ to a minor, it must go into a court-supervised trust account UNLESS the gift qualifies to be held as a custodial account. The requirements for a custodial account vary from state to state. You'll need to look up your state's Uniform Custodian Trust Act, Uniform Gifts to Minors Act, Uniform Transfers to Minors Act, or similar law to find the exact wording needed in your state. Or your bank may have the forms readily available.
 

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