The amount of people living subsidized by their parents is astounding

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Except they often pay bills directly which is not really tracked. They pay their grandkids college tuition directly to school and money is just magically gone.

anyone can pay anyone's medical or education costs for any reason and it is not an IRS event

Medical too?? What about groceries, summer camps, etc.?

So there really is no limit on the exemption? The "limit" is $19K this year, or really $38K since there are two grandparents. So they could give $38K to their kid, $38K to spouse, $38K to each grandkid, plus pay all their living expenses??? Presumably at least they can't pay mortgage or car payments since those are tangible assets, but still...

[Anonymous]

Anonymous wrote:

Anonymous wrote:Just in the last 2 years we made 1m/year and my parents who make 80k/year on retirement have full medical benefits but have everything fully paid off want to pay for private school and I am ok with it because they don't have any other use for their money. If they end of running out of money i would help them. However their generation is very different than our's where they don't have any debts.

If you're making $2m per year and your letting your retired parents clocking $80k a year in retirement pay for your kids' private school education, you are a f4cking loser. Hope I'm crystal clear.

And you're a jealous loser in life.

[Anonymous]

Under this administration, the difference between families with generational wealth and families without will become even more stark. Better start working harder, OP, for your future generations and give up hope for your own success and comfort.

[Anonymous]

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Because some (many?) of these families are going to hit those lifetime limits even AFTER they give their kids this money every year. By staying under the limit, the parents can give 38k/year to each child (and another 38k to the spouse if they want to) and not have it affect the lifetime limit at all.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Except they often pay bills directly which is not really tracked. They pay their grandkids college tuition directly to school and money is just magically gone.

anyone can pay anyone's medical or education costs for any reason and it is not an IRS event

Medical too?? What about groceries, summer camps, etc.?

So there really is no limit on the exemption? The "limit" is $19K this year, or really $38K since there are two grandparents. So they could give $38K to their kid, $38K to spouse, $38K to each grandkid, plus pay all their living expenses??? Presumably at least they can't pay mortgage or car payments since those are tangible assets, but still...

The exclusions are educational and medical. Paying summer camp tuition would probably not raise any flags. Directly paying for groceries likely wouldn't either. Although neither of these things are specifically exempted the way educational and medical are.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't understand the posters that are nasty and mean. I am a self made multi millionaire but I have no jealousy towards people receiving large inheritances or periodic help from their parents, it's the way of life, they were born lucky and that's where the story ends. My kids will be like them as I plan to make their lives very comfortable, envy is the most useless emotion, you get absolutely nothing out of it but bitterness. We all play with the hand we have been dealt.

You don’t understand that gaslighting the poors that their envy is the true character flaw isn’t going to work forever. See: the French Revolution

Like I said, it's the way of the world. Even poors in this country are incredibly lucky to be born in America, REAL poverty is in 3rd world countries, everything in life is relative, I have seen the kind of poverty you can't even imagine. You can't stop someone for being born in a privileged household, that's ridiculous, it's just their luck. And, yes envy is a character flaw because it doesn't achieve anything except bitterness.

So, what happened after French Revolution? Do well off people in France don't help their kids?

You are so clueless.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Thank you! That's been getting to me also, but I figured someone else had noted it earlier. It's single form, not like it significantly adds to your tax return preparation time/hassle- every software program or CPA can handle it.

I have a related question, actually. I'll confirm with my tax preparer, but if you are the *recipient* of a gift over 18k, do you need to report this as income on your taxes or no? I received a one-time gift of 40k from my parents last year to help pay off a loan. They actually split it into separate checks -- one to me, one to my DH, and one to my DC, so no check actually exceeded 18k. But DH and I will file jointly and our DC is a dependent. DH and I have been arguing over how we are supposed to handle it and our tax preparer has not gotten to our docs yet and we don't want it getting down to the wire so I've been trying to get a definitive answer.

Thank your parents for gifting this in $18k increments. This means you do not owe taxes on it. Really, they could have both give just you $36k but whatev. No tax due on the gift.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Thank you! That's been getting to me also, but I figured someone else had noted it earlier. It's single form, not like it significantly adds to your tax return preparation time/hassle- every software program or CPA can handle it.

I have a related question, actually. I'll confirm with my tax preparer, but if you are the *recipient* of a gift over 18k, do you need to report this as income on your taxes or no? I received a one-time gift of 40k from my parents last year to help pay off a loan. They actually split it into separate checks -- one to me, one to my DH, and one to my DC, so no check actually exceeded 18k. But DH and I will file jointly and our DC is a dependent. DH and I have been arguing over how we are supposed to handle it and our tax preparer has not gotten to our docs yet and we don't want it getting down to the wire so I've been trying to get a definitive answer.

Thank your parents for gifting this in $18k increments. This means you do not owe taxes on it. Really, they could have both give just you $36k but whatev. No tax due on the gift.

God, people. Learn to google.

You do not owe taxes if your parents give you $36k and you do not owe taxes if they give you $360k. If they give you more than the exemption in a year, they need to file a form (7 oh something) to count the excess towards their lifetime gift/estate tax exemption. No tax is due until they exceed the exemption.

The end.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why does it matter? What is this obsession with how other people get their money?

Stop with the fake superiority that you are somehow better than them. If anything, you are jealous otherwise why would you care?

And I’m fully self-supporting but I sure wouldn’t turn down money if my parents gave it to me. So rock on those of you getting money! Make it work for you.

Because money is interesting. And because I never knew about this until we became new-money Arlington types hanging out with people from this area. It’s a new concept to me. I’m not obsessed and don’t think anyone is better or worse because of it. But come on. It’s fascinating to see behind the curtain. I love the rags to riches stores just as much

Things have changed a lot in Arlington in the last 10-15 years. There are people in my neighborhood in $1.5M houses that bought them for $450k under 4% in 2010-2012 and saved up for an addition, there are people like us who bought in 2015-2020 and paid $700-900k, then there are people who bought the same house for $1.3-1.5M at today’s rates and have a mortgage 2x what mine is. Lots of SAHM and 2 fed households - they just bought in when prices and rates were much lower. Not everyone had help, a lot of them just had a head start.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Because some (many?) of these families are going to hit those lifetime limits even AFTER they give their kids this money every year. By staying under the limit, the parents can give 38k/year to each child (and another 38k to the spouse if they want to) and not have it affect the lifetime limit at all.

Some…but not very many at all…will hit the $28MM limit. Only 225,000 people in the entire US have a net worth at or above that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For everyone that claims to be wealthy, why is everyone so clueless on how inheritance/gift taxes work?

You aren't limited to $18k per year...you are limited to almost $14MM (for single person, $28MM for a married couple estate) in lifetime inheritance under current federal tax rules.

Whatever you are gifted each year is counted towards that $14MM/$28MM, but the giver only pays a tax on any gifts that exceed the lifetime exclusion.

You have to report any amounts given above $18k to the IRS, but you don't pay any tax on the excess until you hit the lifetime exclusion.

Were you thinking that the kids/grandkids receiving 38K per year weren't going to inherit more than 14M each?

Well, no they won’t…considering a very small amount of people in the entire country have that amount of money. Only 225,000 people in the entire US to be exact.

Most of the kids getting their $19k or $38k don’t have parents that are UHNW…more like $10MM-$15MM parents (the total exemption is $28MM).

[Anonymous]

Anonymous wrote:I’m one of those people – my parents gift me the $36,000 max every year. Why do you care?

Everyone’s dealt a different hand in life. I have that annual gift but had issues with mental health in the past which mean that I’ll never work the type of jobs that pay more than $100-$150K per year.

I don’t think the OP is referring to people like you. More like the example above where the parents clearly purchased a multi-million home for their kid and pay private tuition for the grandkids.

[Anonymous]

Anonymous wrote:I'm over 50 and have never met anyone like this. What kind of loser would accept money from parents/family? It's not that hard to just get a job and pay your bills in the US, assuming you didn't have kids before finishing college.

I'm in my 50's too and I don't know anyone in my circle like this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m one of those people – my parents gift me the $36,000 max every year. Why do you care?

Everyone’s dealt a different hand in life. I have that annual gift but had issues with mental health in the past which mean that I’ll never work the type of jobs that pay more than $100-$150K per year.

I don’t think the OP is referring to people like you. More like the example above where the parents clearly purchased a multi-million home for their kid and pay private tuition for the grandkids.

Dude even $36k a year in gifted money is insane. I make a pretty solid income by most standards and haven’t even seen 1/10th of this in the form of gifts in any given year. I would be exceedingly grateful to have someone give me that much, especially tax free, every 12 months. I think the most we ever got was $3000 to help with our wedding, which I still really appreciated.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm over 50 and have never met anyone like this. What kind of loser would accept money from parents/family? It's not that hard to just get a job and pay your bills in the US, assuming you didn't have kids before finishing college.

I'm in my 50's too and I don't know anyone in my circle like this.

Everybody in your circle would share this information with you? I never talk to people about income or family gifts--how gauche.