Parents gifting property to son and wife

[anteater]

thanks.

and great sense of humor. i havent found someone to put up with me yet, so i cant trade her in.

Just in case... The first part was also humor.

A gift to a kid is still a gift. Whether the wealthy (or non-wealthy, for that matter) report... ????

 

[tranquility]

Remember also, the use of a car is not the car. The parent often keeps title and just gives the kid the use. Helps keep the younguns in line.

 

[george2010]

The parent often keeps title and just gives the kid the use. Helps keep the younguns in line.

Might keep the younguns in line, but also exposes the parent to liability if the younguns get into accidents. For any parents with substantial wealth (eg. enough to give a $50,000 sports car to a son), I'd suggest that as soon as the child is over 18 and not living under parents' roof, any car he/she is driving should be titled and insured in his/her own name to prevent lawsuits from going after the deep pockets of the parents.

 

[tranquility]

While true, it does not reflect the reality of a parent giving a child a sports car. In most cases, they are still under the roof or at college.

 

[TrustUser]

hi ant,

i knew you were kidding about the first part, but i took it to be spiced with sarcasm. in other words, i took it to be that they do try to get away with it some times.

one of the reasons i gave the car example was cuz of the liability - i figured they may not keep it in their own names. and i knew it was a common high dollar gift that is given.

but from my reading in the past, the main reason for the law in the first place was to keep wealthy people from sheltering their income by placing funds in their kids accounts, and then the last dollars of income end up getting taxed at a lot lesser rate ?

is the lesson that if they give something to their kids, it better be something other than a gift of money ?

i was pretty sure that if a parent buys his kid a house - that it gets included in the lifetime exemption for the parent ? (as far as gift tax rules)

 

[anteater]

but from my reading in the past, the main reason for the law in the first place was to keep wealthy people from sheltering their income by placing funds in their kids accounts, and then the last dollars of income end up getting taxed at a lot lesser rate ?

Not really. The gift tax rules were put in place to prevent people from dodging the estate tax by simply giving away assets. The "kiddie tax" deals with unearned income on a child's assets.

is the lesson that if they give something to their kids, it better be something other than a gift of money ?

A gift is a gift, of course, of course,
And no one polices a gift of course
That is, of course, unless the famous Mister Ed blabs with the revenooers around...

 

[Theclemtc]

Buy it from them for $1

What is the name of your state (only U.S. law)? Oklahoma
My parents own a piece of property in an RV park valued at $50 to 55k. They want to give this property to me and my wife. I don't understand all of the gift tax laws, but do know that they can give collectively $26k per yr, per individual. That said, can they give me 26k and my wife 26k, which is the approx value of the property without getting hit for a gift tax penalty?

Buy it for $1

 

[anteater]

Buy it for $1

Which only makes the amount of the gift $1 less.

That stuff is not an end run around the gift reporting rules.

 

[TrustUser]

Not really. The gift tax rules were put in place to prevent people from dodging the estate tax by simply giving away assets. The "kiddie tax" deals with unearned income on a child's assets.


A gift is a gift, of course, of course,
And no one polices a gift of course
That is, of course, unless the famous Mister Ed blabs with the revenooers around...

hi ant,

you must be part of the older generation. i loved that show as a kid, and still like the melody of the jingle.

i like to do that sort of stuff with teenagers. most of the time i get a blank stare back, which is loads of fun. LOL.