Gifts

[Mark Goldberg]

Dad pays 25 year old, non dependent, son's state tax bill of $5,000. Can the son treat this as a gift to him and claim the Schedule A deduction for state taxes paid?

[Bees Knees]

Yes.

TTB, page 21-18 says "Gifts include transfers of cash, personal property, and payment of debts or expenses for another person."

In other words, the father paying the son's tax bill is treated no different than if the father gave the son $5,000 cash, and the son turns around and uses it to pay his tax bill.

[Mark Goldberg]

Thanks Bees

I read TTB cover to cover but missed that point. Thanks for pointing it out.