Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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- Joined: Sun Jan 15, 2017 2:31 pm
I know that my wife and I can each give $14,000 tax-free per year to our child without it counting against the lifetime exclusion. We can also each give $14,000 tax-free per year to my brother and his wife (who don't need the money). So suppose my wife and I each give $7,000 tax-free to each of my brother and his wife. Can my brother and his wife then give this $28,000 tax-free to our child?
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- Joined: Thu Apr 05, 2007 2:44 pm
I believe this is what is called a step transaction. If so, the IRS would consider it a gift from you to your children.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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- Joined: Tue Oct 27, 2015 10:11 am
jebmke wrote:I believe this is what is called a step transaction. If so, the IRS would consider it a gift from you to your children.
That's right. Many Google hits for step transaction irs will provide lots of details.
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- Joined: Sun Mar 04, 2007 8:38 pm
- Location: Florida
Yes, this has been discussed frequently and at length in numerous threads. It violates what is known as the Step Transaction Doctrine. Quite sinply, the IRS will ignore the intermediate steps and treat the transaction for its real intent.
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- Joined: Tue Jul 15, 2014 3:26 pm
Omg do people never search! We just went through this last month. Exact same topic. And I think Gill gave the exact same answer!
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