Giving away money to children to avoid taxes?
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howie
Apprentice
Joined: 24 Oct 2006
Posts: 4
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 Posted: 05/07/08 - 05:43 Post subject: |
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| I have a small business for quite some time, but never has a year been so successfull and I have made a large profit. Unfortunately, that leaves me with a high tax to pay. I would like to know is giving away this money to children a good way to avoid paying taxes. Thanks in advance for any suggestions. |
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bank
Apprentice
Joined: 03 Aug 2007
Posts: 5
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| Posted: 06/06/08 - 01:04 Post subject: |
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| It seems to me that you have a dilemma which can be relatively easily solved. First of all, do not think that gifts are a magic stick with which you can avoid taxes. There are certain amounts to which you can make it happen. For example, you can give up to 10,000$ to each of your kids, or 20,000$ if you are donating it with your spouse. If you are giving away a property, it is not taxable if a market value is below 600,000$. Also, that amount is an upper limit for the total sum of your gifts. So, if you have two kids, and give each 20,000$, it will not be taxable, but then you will have 560,000$ dollars left as a sum to which you will not pay taxes. I hope you find the info helpful. |
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