Reply to Minimizing taxes when transferring money between parents and adult children

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]They can each give you $14k a year. They can pay your rent/lawyer directly/credit card/private school directly and it won't count toward the maximum. [/quote]

If they pay your rent/lawyer/credit card it counts as a gift to you. there is an exception for private school. so for rent and all the other items added up, anything over[b] $14k counts towards the maximum[/b].[/quote]

Again doesn't matter until the gift gives 5.4 million away.  $14K per year to each person can be excluded.  But really the gifter can give anything they want.  You don't pay any taxes regardless.  Don't worry about the $14k.  [/quote]

PP - thanks much! you should start a new thread on this... a lot of people (including myself) have a mental block on this "14k/year" rule.  i had no idea about 5.4 mil limit. [/quote]

Yeah it seriously doesn't matter unless you're concerned about estate taxes.  The purpose of the gift tax limit is so that people with large estates can't just give it all away before they die to avoid estate taxes.

If you're a middle class or upper middle class American it probably doesn't matter.  
[b]
I'm not sure why everyone is so focused on the 14k.[/b]  Every once in a while there is an article about how it doesn't matter for most people but doesn't seem to gain a lot of attention.  [/quote]

Probably the same people who don't want to make that extra $1,000 because it will put them in a higher tax bracket and they're so much better off not making that extra money![/quote]

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