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> if you point the police at anyone they'll find crimes. The same is true for our tax laws. I can almost guarantee every adult over 30 has made an error in th
by nostromo 7y ago
> if you point the police at anyone they'll find crimes.
The same is true for our tax laws. I can almost guarantee every adult over 30 has made an error in their tax return.
There are a million examples. Here's one: do you know someone that has stayed with a friend or family member rent free? The guest should have claimed the fair rent value of this non-monetary "gift" on their tax return. But literally nobody does.
- arcticbull 7y agoErrors are fine, you don't go to prison for an error. You get audited, the IRS takes a look, they tell you how much you actually owed, plus interest. I actually don't mind the additional scrutiny this will bring to dark corners of the tax code. The reality is we owe it today, and if we realize it, there may be a bigger push to simplify the tax code down (to be clear, this does not mean reduce tax burden, but just reduce complexity). Let's take this down a level. If your friend owes you $200, and paid you back $150 because of an honest mistake, does that mean your friend no longer owes you $50 because, oops? Of course not. This is no different at the scale of the IRS.
- sokoloff 7y agoGifts between individuals under $15K/yr have no tax consequences.
- arcticbull 7y agoAnd if I'm not mistaken the amount over $15K counts solely to reduce your $11,400,000 lifetime exclusion, and only once you exceed that number do you actually have to pay taxes. [1] [1] https://www.nerdwallet.com/blog/taxes/gift-tax-rate/ https://www.nerdwallet.com/blog/taxes/gift-tax-rate/
- sokoloff 7y agoThat's also correct. Further, if a married couple (or other joint owner/tenant) let someone stay with them, they can each gift the annual gift amount to the free "tenant".