Have a client asking me if it would have been better to gift money to her son rather than loan it. The thinking that somehow it would save her money on her current year's tax return. I'm not seeing anything. Feedback? Thanks.
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A gift of under $11,000 (2005) is not reported anywhere as it is not income to the receiver and not deductible to the giver. The only advantages of giving is that it gets it out of the giver's estate if they were to die with an estate valued at more than $1,500,000 (2005).
Of course a loan of more than $10,000 is required the parties to consider interest on the loan. -
That was my thinking also. Thanks for the feedback OldJack.Comment
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