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Gift Tax

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L

lawhelp

Guest
What is the name of your state? Pennsylvania

I took out a (10 year) home equity loan of $15,000 to pay into the State sponsored Pennsylvania Tuition Account Program (TAP 529) for my son. In reading their literature, I found that the gift tax laws apply ($11,000 limit). Also, I read that there is a possibility that it can be averaged over 5 years so that the tax could be avoided. It did not go into any detail. Is this true and how does it work? Are there any special forms?
 


L

loku

Guest
First of all, if you are married, then you and your spouse can elect to join in the gift and in that case there would be a $22,000 annual exclusion.

If you are not married, you would have to file a gift tax return, but there would be no tax because in addition to the $11,000 annual exclusion, you have a lifetime exclusion of $1,000,000, which you can apply against the $4,000.
 

abezon

Senior Member
Or you could give $11,000 to your son and give $4,000 to your ex-wife/sibling/parents and THEY could give $4,000 to your son, thus avoiding the bother of averaging the gift.
 

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