Comments on: How to Manage Taxes on Donations Received – Reader Question http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/ Money Tips for a Better Life Sat, 20 Mar 2010 00:29:02 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Ben http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/comment-page-1/#comment-34493 Ben Tue, 04 Dec 2007 13:33:06 +0000 http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/#comment-34493 Thanks for the tips guys. $12K per person sounds like a lot but with the cost of health care these days I bet a major extended hospital stay could go through that money pretty quick. Thanks for the tips guys. $12K per person sounds like a lot but with the cost of health care these days I bet a major extended hospital stay could go through that money pretty quick.

]]> By: Tim http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/comment-page-1/#comment-33916 Tim Fri, 30 Nov 2007 19:04:02 +0000 http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/#comment-33916 each person can donate $12k (not less than $12k) per person, under the gift tax exclusion. This could mean that one person could give the child $12k and each parent $12k each. however, the person receiving the gift doesn't have to pay the gift tax anyways. you can also receive more than $12k up to the lifetime gift-tax exemption limit of $1million dollars per person. But even then, it is the gift giver, not the gift receiver that has to pay the gift tax if it exceeds the limits. each person can donate $12k (not less than $12k) per person, under the gift tax exclusion. This could mean that one person could give the child $12k and each parent $12k each. however, the person receiving the gift doesn’t have to pay the gift tax anyways.

you can also receive more than $12k up to the lifetime gift-tax exemption limit of $1million dollars per person. But even then, it is the gift giver, not the gift receiver that has to pay the gift tax if it exceeds the limits.

]]> By: HC http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/comment-page-1/#comment-33892 HC Fri, 30 Nov 2007 16:57:02 +0000 http://moneysmartlife.com/how-to-manage-taxes-on-donations-received-reader-question/#comment-33892 My understanding is that any of these donations would fall under gift tax rules. As long as each donor gives less than $12,000 to this family (no matter how large the overall total is), both donors and recipients should be in the clear. (This does NOT mean averaging out donations; each person has to donate less than $12K.) Alternatively, the donors could send money directly to the hospital or treatment center on the child's behalf; that also avoids gift tax implications. http://www.irs.gov/newsroom/article/0,,id=107815,00.html My understanding is that any of these donations would fall under gift tax rules.

As long as each donor gives less than $12,000 to this family (no matter how large the overall total is), both donors and recipients should be in the clear. (This does NOT mean averaging out donations; each person has to donate less than $12K.) Alternatively, the donors could send money directly to the hospital or treatment center on the child’s behalf; that also avoids gift tax implications.

http://www.irs.gov/newsroom/article/0,,id=107815,00.html

]]>