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tax implications on a monetary gift

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vetat

Guest
a monetary gift to a power-of-attorney

i live in pennsylvania. i am the attorney-in-fact for my elderly aunt who is not competent enough to handle her own affairs. as a gesture of gratitude for taking care of all of her financial and personal affairs over the last 10 years she wants to give me a cash gift of $100,000, a small portion of her estate. i understand from reading previous posts that i would not have to pay income tax on the gift, she would. are there any other taxes i would owe?

also, since i am the one to file her taxes, pay her bills, handle her investments, etc. i would be, in essence, giving a gift to myself. is there a particular way I should handle this? any information you can give will be greatly appreciated.

thank you for your time.

[Edited by vetat on 06-25-2001 at 12:28 AM]
 


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loku

Guest
Unified credit

Neither your aunt nor you would have to pay income tax on the gift; however, your aunt would have to file a gift tax return. There is an annual exclusion of $10,000 of gifts from any donor to any one donee, so that leaves $90,000. There is currently a $675,000 lifetime exclusion of gifts, so she would set of part of the exclusion against the gift, and she would owe no tax. However, the $675,000 exclusion (which is scheduled to increase over the years) applies not only to the gift tax, but also to the estate tax, so when she dies, the exclusion would be $90,000 less than it would have been without the gift.

If your aunt is not competent, her other potential heirs might charge you with undue influence since you take care of all her affairs. If there are other potential heirs, I suggest you see a local attorney, familiar with elder law, to assess this for you and to determine how to have the transfer made without signs of undue influence.
 
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vetat

Guest
thank you, loku, for the prompt reply. the information you provided is greatly appreciated.

vetat
 

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