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Gifting Retro Pay Possible Tax Consequences

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Tbird

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  • Founder

here's a question and i'm just not sure what the answer is, anyone out there want to take a stab at this?

if you receive retro pay, non-taxable to you, and then you in turn gift it to someone else, will that person then be responsible for taxes on that gift?

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any gift over 10,000 to any one person is subject to tax. The giver is taxed not the reciever. Depending upon the marrige laws of the state you live in, the gift may or may not be taxable between spouses. If you live in a "no fault, community property" state then the funds are considered to be ownwed by your spouse already. It doesn't matter if you spouse has accessto those funds (joint bank account) or not (single bank account).

You can gift 10k to 10 different people and not be taxed at all. Suppose you want to give one person 40K. It's better to give that person 10k and then give 10k each to his sposue and children. No tax.

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  • HadIt.com Elder

rdawg is correct but I believe that you can make a one time larger gift and than anything else would be subject to tax. As they say best to double check with IRS and probably an attorney or CPA before you pull the trigger.

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  • HadIt.com Elder
any gift over 10,000 to any one person is subject to tax. The giver is taxed not the reciever. Depending upon the marrige laws of the state you live in, the gift may or may not be taxable between spouses. If you live in a "no fault, community property" state then the funds are considered to be ownwed by your spouse already. It doesn't matter if you spouse has accessto those funds (joint bank account) or not (single bank account).

You can gift 10k to 10 different people and not be taxed at all. Suppose you want to give one person 40K. It's better to give that person 10k and then give 10k each to his sposue and children. No tax.

"The giver is taxed not the reciever."

Are you saying that, for example, if I gave my Son $40K, then I would be the one to have to pay the tax on this $40K.

Well, that being the case, then he ain't gettin nuttin! B)

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Don't trust the IRS and the banking industry...Give each 9,999.99 in each day so the bank doesn't turn it into IRS to investigate. Once you give them 10,000.00 the bank notify's IRS then they start investigating. It turns into a big mess.

So give under 10,000.00 one time each day 9,999.00 is ok then next day 9,999.99 for however many days you want but never 10,000.00 or more in one day. Be smart and safe. We got screwed as well as uncle did 2x and in-laws did too.

Don't try to give 9,999.99 to more than 1 person a day too.

Edited by halos2
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  • Founder

thanks for the advice i will pass this along to the veteran.

Don't trust the IRA and the banking industry...Give each 9,999.99 in each day so the bank doesn't turn it into IRA to investigate. Once you give them 10,000.00 the bank noffys IRS then they start investigating. It turns into a big mess.

So give under 10,000.00 one time each day 9,999.00 is ok then next day 9,999.99 for however many days you want but never 10,000.00 or more in one day. Be smart and safe. We got screwed as well as uncle did 2x and in-laws did too.

Don't try to give 9,999.99 to more than 1 person a day too.

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