Thanks – so the way I understand it – the only advantage gifting to children has is you are no longer paying taxes on the money you may have invested and it will reduce your estate.
Permalink Submitted by Alan Spross on Fri, 2011-04-08 02:55
Yes, for the donor that is about it.
If you pay for over half the support of the child, you could claim their medical expenses as your medical expenses. Also, if you pay tuition or medical expenses of the child directly, those amounts are not charged against the 13,000 annual exclusion.
Permalink Submitted by Alan Spross on Thu, 2011-04-07 20:38
No. A taxable distribution would have to be taken and the gift made from the after tax proceeds. The annual gift tax exclusion is 13,000 per donee.
Permalink Submitted by [email protected] on Fri, 2011-04-08 02:43
Thanks – so the way I understand it – the only advantage gifting to children has is you are no longer paying taxes on the money you may have invested and it will reduce your estate.
Permalink Submitted by Alan Spross on Fri, 2011-04-08 02:55
Yes, for the donor that is about it.
If you pay for over half the support of the child, you could claim their medical expenses as your medical expenses. Also, if you pay tuition or medical expenses of the child directly, those amounts are not charged against the 13,000 annual exclusion.