7 ms·

Aren't tax free gifts capped at $14,000.00 per year? Edit: Er, I guess it's $16,000.00 without needing to report it, and then anything above that can be offset

Aren't tax free gifts capped at $14,000.00 per year? Edit: Er, I guess it's $16,000.00 without needing to report it, and then anything above that can be offset against a $12 ish million lifetime exclusion. https://money.usnews.com/money/personal-finance/taxes/articles/gift-tax-tax-rules-to-know-if-you-give-or-receive-cash https://money.usnews.com/money/personal-finance/taxes/articl...

rsstack 4y ago
You need to report a gift over $14k but you don't owe until much higher limits. Same as how people who make very little money have to report income even if it's lower than the lowest tax bracket. Also, as a reminder, the gifter pays the tax and not the person who received the gift. If someone gifts you an illiquid asset, you aren't forced to go into debt to pay a tax. But the gifter has to figure things out on their end.
- cft 4y ago
  This is correct. The tax thresholds are of the order of 12mm
- ambicapter 4y ago
  What does the gifter pay tax on? -$14k?
  - rsstack 4y ago
    This isn't an income or gains tax. Not all taxes are about money gained. For example, sales tax when you pay $100 isn't negative $8, it's $8. When gifting large amounts of money, the IRS gets more money on top (so, if you're super rich, don't gift ALL off your money, and leave some aside for tax season).
  - delecti 4y ago
    Gifts larger than 14k essentially count against your eventual estate tax exclusion. If you give away $12.06 million on the day before you die (which would be tax-free), then the entirety of your estate is taxed at 40% (both 2022 numbers). If you die without having made any gifts exceeding $14k, then the first $12.06 million of your estate is not taxed at all, and the remainder is taxed at 40%
    - toomuchtodo 4y ago
      Not investing or financial advice. If your estate will incur said tax, be giving up to your annual exclusion till death.
      - bcrosby95 4y ago
        The exclusion amount is also per recipient.
      - gopher_space 4y ago
        It's sort of how you handle assisted living costs. Everything's cheaper if you've distributed your assets beforehand.
        mrguyorama 4y ago
        It's also why means-testing an end of life program that only looks back X number of years is inevitably not actually testing means. Every rich person has a guy who will tell them how to avoid it legally. Every poor person never had any money in the first place. It only ever hits middle class and upper-low class people who saved money for some of their life and were never told that they had to disburse their assets at X-1 years before they planned to need care and get hit with a huge penalty to their assistance when they inevitably have to move some of their cash around to pay for some of their expensive care. If you don't want rich people getting public funds for things, you have to be able to look beyond their money games, which is hard, expensive, often purposely sandbagged, and not usually successful. So just tax them their whole life instead, and let them get back some of what they put in with every other person.
        newjersey 4y ago
        I would go a step further and call for an end to all means testing for anything government funded. I am relatively poor and this will help me because even though I am poor I still have to prove I am poor which is burdensome.
Avicebron 4y ago
It says so in the article, but here's some corroboration https://www.schwab.com/learn/story/estate-tax-and-lifetime-gifting https://www.schwab.com/learn/story/estate-tax-and-lifetime-g... EDIT: read a little further, guess the 11-12 million exemption only lasts until 2025, so if you can use, do it fast.
pksebben 4y ago
[flagged]
- dsfyu404ed 4y ago
  Careful now. "Intellectuals" don't tend to do very well when things go that way. A heck of a lot of them will wind up losing their heads along with the elite. Techies, journalists, and other well-ish off white collar cogs in the machine would do well to think a little more about what people outside their bubble think about their profession's effect on society.
  - omginternets 4y ago
    This. Y'all need to read more history.
    - notch898a 4y ago
      The interesting history is people will behead even themselves to get at the elite. See everyone in Zim / Rhodesia driving out the farmers that they surely knew they needed to eat, followed by utter destruction of their foodstocks and hyperinflation.
  - pclmulqdq 4y ago
    It's OK, the TCJA was from the party they oppose, so they don't mind you bad-mouthing that law. You had better not question the ACA or the "inflation reduction act."
    - pksebben 4y ago
      Slow your roll. You have no idea who I am or what I stand for - and I'd bet we're more aligned than you think. I'm of the opinion that both parties have been captured by criminals, so even if you fall on partisan lines, we agree on at least half. The ACA was a distraction tactic so the banks could rob us blind and the inflation reduction act isn't a lot better - so great, the top 1% are gonna pay 0.2% more in taxes. Whee. The solution isn't to back the lesser evil, it's to stop backing evils altogether.
NotYourLawyer 4y ago
The gift tax thing seems like a distraction. He would have needed to file a gift tax return for giving $10 million, but no taxes would be due. But he could just as easily have given $100 million, filed the return, and paid a large gift tax—he had plenty of cash floating around back then. I guess what I’m saying is, it wasn’t a way to hide the gift, because it still triggered the need for a gift tax return filing.
- erosenbe0 4y ago
  Yeah that's how I read it. He gave [possibly ill-gotten] money to his parents. If tax was involved, then the treasury might need to give that fraction back to the bankruptcy trustee. If not, great, then it's just the family that needs to disclose to the trustee.
detourdog 4y ago
if the gift isn’t cash Alameda can determine the value of the gift mor or less.

rsstack 4y ago

You need to report a gift over $14k but you don't owe until much higher limits. Same as how people who make very little money have to report income even if it's lower than the lowest tax bracket. Also, as a reminder, the gifter pays the tax and not the person who received the gift. If someone gifts you an illiquid asset, you aren't forced to go into debt to pay a tax. But the gifter has to figure things out on their end.

cft 4y ago
This is correct. The tax thresholds are of the order of 12mm
ambicapter 4y ago
What does the gifter pay tax on? -$14k?
- rsstack 4y ago
  This isn't an income or gains tax. Not all taxes are about money gained. For example, sales tax when you pay $100 isn't negative $8, it's $8. When gifting large amounts of money, the IRS gets more money on top (so, if you're super rich, don't gift ALL off your money, and leave some aside for tax season).
- delecti 4y ago
  Gifts larger than 14k essentially count against your eventual estate tax exclusion. If you give away $12.06 million on the day before you die (which would be tax-free), then the entirety of your estate is taxed at 40% (both 2022 numbers). If you die without having made any gifts exceeding $14k, then the first $12.06 million of your estate is not taxed at all, and the remainder is taxed at 40%
  - toomuchtodo 4y ago
    Not investing or financial advice. If your estate will incur said tax, be giving up to your annual exclusion till death.
    - bcrosby95 4y ago
      The exclusion amount is also per recipient.
    - gopher_space 4y ago
      It's sort of how you handle assisted living costs. Everything's cheaper if you've distributed your assets beforehand.
      - mrguyorama 4y ago
        It's also why means-testing an end of life program that only looks back X number of years is inevitably not actually testing means. Every rich person has a guy who will tell them how to avoid it legally. Every poor person never had any money in the first place. It only ever hits middle class and upper-low class people who saved money for some of their life and were never told that they had to disburse their assets at X-1 years before they planned to need care and get hit with a huge penalty to their assistance when they inevitably have to move some of their cash around to pay for some of their expensive care. If you don't want rich people getting public funds for things, you have to be able to look beyond their money games, which is hard, expensive, often purposely sandbagged, and not usually successful. So just tax them their whole life instead, and let them get back some of what they put in with every other person.
        newjersey 4y ago
        I would go a step further and call for an end to all means testing for anything government funded. I am relatively poor and this will help me because even though I am poor I still have to prove I am poor which is burdensome.

Avicebron 4y ago

It says so in the article, but here's some corroboration https://www.schwab.com/learn/story/estate-tax-and-lifetime-gifting https://www.schwab.com/learn/story/estate-tax-and-lifetime-g... EDIT: read a little further, guess the 11-12 million exemption only lasts until 2025, so if you can use, do it fast.

pksebben 4y ago

[flagged]

dsfyu404ed 4y ago
Careful now. "Intellectuals" don't tend to do very well when things go that way. A heck of a lot of them will wind up losing their heads along with the elite. Techies, journalists, and other well-ish off white collar cogs in the machine would do well to think a little more about what people outside their bubble think about their profession's effect on society.
- omginternets 4y ago
  This. Y'all need to read more history.
  - notch898a 4y ago
    The interesting history is people will behead even themselves to get at the elite. See everyone in Zim / Rhodesia driving out the farmers that they surely knew they needed to eat, followed by utter destruction of their foodstocks and hyperinflation.
- pclmulqdq 4y ago
  It's OK, the TCJA was from the party they oppose, so they don't mind you bad-mouthing that law. You had better not question the ACA or the "inflation reduction act."
  - pksebben 4y ago
    Slow your roll. You have no idea who I am or what I stand for - and I'd bet we're more aligned than you think. I'm of the opinion that both parties have been captured by criminals, so even if you fall on partisan lines, we agree on at least half. The ACA was a distraction tactic so the banks could rob us blind and the inflation reduction act isn't a lot better - so great, the top 1% are gonna pay 0.2% more in taxes. Whee. The solution isn't to back the lesser evil, it's to stop backing evils altogether.

NotYourLawyer 4y ago

The gift tax thing seems like a distraction. He would have needed to file a gift tax return for giving $10 million, but no taxes would be due. But he could just as easily have given $100 million, filed the return, and paid a large gift tax—he had plenty of cash floating around back then. I guess what I’m saying is, it wasn’t a way to hide the gift, because it still triggered the need for a gift tax return filing.

erosenbe0 4y ago
Yeah that's how I read it. He gave [possibly ill-gotten] money to his parents. If tax was involved, then the treasury might need to give that fraction back to the bankruptcy trustee. If not, great, then it's just the family that needs to disclose to the trustee.

detourdog 4y ago

if the gift isn’t cash Alameda can determine the value of the gift mor or less.