Deposit of lump sum
Client is receiving $50,000.00 from her dad. Should she deposit it this year or wait 2 weeks until next year for tax reasons? She needs to do some repair on her home and but also has 4 children with some bills. She wants to start IRA as well. Thanks for help.
Permalink Submitted by Alan Spross on Mon, 2009-12-21 22:09
Is this a cash gift from a still living parent? If so, there is to tax impact on her since this is not taxable income to her. She could use some funds to make a regular IRA contribution for 2009 and 2010 providing she also has the earned income in those years required for an IRA contribution.
The order of creditor bill payment should be addressed in a different forum, also the issue of current savings vrs debt retirement. There may also be some stipulations from her Dad on what the gift is to be used for.
Permalink Submitted by Edward Czapor on Tue, 2009-12-22 03:07
If this is a cash gift by check, it should be deposited this year to count as a 2009 gift for gift tax purposes of her dad. If a certified check is given this year it will still count as a 2009 gift even if not deposited until next year.