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The gift tax exemption is higher than the amount of unsecured debt most people owe.
by lonelappde 7y ago
The gift tax exemption is higher than the amount of unsecured debt most people owe.
- zaroth 7y agoIt is now, but this was not always true.
- ac29 7y agoForget about unsecured debt - if a parent wants to give their child $100,000 there is no way to do that without paying taxes (or spreading it out over many years). If they could simply "loan" their child $100k (with no intention to ever get paid back), then forgive the debt tax-free, they'd have successfully gotten around the gift tax. The same thing could be potentially be used by an employer: instead of paying wages, they could just "loan" (again, not intending to be paid back) their employee money, then forgive the debt tax-free.