Posted by Frank Chin on June 05, 2003 at 09:02:59:
Hi Richard:
Q: Also possible tax ramifications later on??
A: Plenty
To clarify, the giver is subject to gift taxes both on the Federal and State levels (depends on the state).
We had gifting done within our family, and we got the guidance of a CPA who’s also an attorney.
One person can gift another person $11,000 year tax free. And one person can gift more than $11,000 for the year, but that would reduce the unitary lifetime limit tied to taxable estate. Currently the limit increases every year to the year 2010 and it sunsets.
Thus, how the giting should be down is dependent on the estate issue of the giver. Other issues include whether your client is married and have children. For instance, Grandma can gift $11,000 each to her daughter, son in law, and each of the grandchildren.
So, I would suggest the advice of a CPA and or estate attorney to avoid problems.
Frank Chin