Pass-Through Giving

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
cgrinst1
Posts: 3
Joined: Sun Jan 15, 2017 2:31 pm

Pass-Through Giving

Postby cgrinst1 » Sun Jun 18, 2017 12:59 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?

jebmke
Posts: 6002
Joined: Thu Apr 05, 2007 2:44 pm

Re: Pass-Through Giving

Postby jebmke » Sun Jun 18, 2017 1:01 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.

RudyS
Posts: 589
Joined: Tue Oct 27, 2015 10:11 am

Re: Pass-Through Giving

Postby RudyS » Sun Jun 18, 2017 8:09 pm

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.

Gill
Posts: 3231
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Pass-Through Giving

Postby Gill » Sun Jun 18, 2017 8:17 pm

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.
Gill

JGoneRiding
Posts: 690
Joined: Tue Jul 15, 2014 3:26 pm

Re: Pass-Through Giving

Postby JGoneRiding » Sun Jun 18, 2017 10:12 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!


Return to “Personal Finance (Not Investing)”

Who is online

Users browsing this forum: Clueless, hand, LifeIsGood, Lindrobe, Snikda and 84 guests