Are you paying directly to CP or are your wages garnished by the state?Hello,
Can I give stock to the custodial parent instead of cash payment for child support? Since the custodial parent is in low tax-bracket, the tax liability would be 0% up to a certain amount. I will appreciate your insight regarding this.
The amount that you would be giving her for child support and alimony would not be a gift at all. Any amount that you give her above and beyond child support and alimony would be a gift, but it would only be a reportable gift if it exceeded $15,000 in any one calendar year.My question is, if I gift stock to my wife instead of cash payment as additional financial help above and beyond alimony, will it cause red flags when I file the gift return?
And how did you come to that conclusion regarding child support, since literally nobody said it was acceptable.Thanks for all your replies. From above, I can conclude that child support can be paid via stock transfer. Any additional transfer of stock considered gift and can go unreported if the amount is under $15,000
Nobody said it was unacceptable Dave. TM did say that a child support agency probably would not accept it, but that is just because they couldn't track it. The child support agency however is not involved in this particular case, so how it is paid is up to the parties.And how did you come to that conclusion regarding child support, since literally nobody said it was acceptable.
Money or the fair market value of property that you give the other parent in payment of your child support obligation is, as LdiJ mentioned, not a gift. Anything else you give her (apart from directly paying her medical expenses) is a gift for federal gift tax purposes. You need to file a gift tax return whenever the total of all gifts made during the year to any one person exceeds the exemption amount for that year. Currently that exempt amount is $15,000. So you could give a $15,000 each to 10 different persons this year and not have to file a federal gift tax return. But if any one of them gets more than $15,000 then you'd need to file a gift tax return.Thanks for all your replies. From above, I can conclude that child support can be paid via stock transfer. Any additional transfer of stock considered gift and can go unreported if the amount is under $15,000
And nobody said it WAS acceptable, nor is this the proper venue to be asking the question.Nobody said it was unacceptable Dave. TM did say that a child support agency probably would not accept it, but that is just because they couldn't track it. The child support agency however is not involved in this particular case, so how it is paid is up to the parties.
It's not a tax law matter.Please look at the last sentences of reply #2 by "Taxing Matters" above.
So?It's not a tax law matter.