Greetings,
Sorry, you can not deduct a gift from your taxes unless it is to a
charity. I doubt that the child would quality.

Regards, Anton...

"ron" <oitbso[at]yahoo.com> wrote in message
news:1807c7b7.0411171113.7a3232dd[at]posting.google.com...
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"Sgt. Sausage" <nobody[at]nowhere.com> wrote in message
news:Akund.3014$EM3.533[at]fe37.usenetserver.com...
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2003 = $8000
2004 = $9000
2005 = $10000
After 2005 indexed for inflation

Plus the Over-50 bonus amount.

Gene E. Utterback, EA

Aren't the limits on a SIMPLE plan up to $10,000 these days?

"Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote in message
news:304o2aF2snku8U1[at]uni-berlin.de...
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======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding.

Thanks to all who responded. Your comments were helpful...Ron

"ron" <oitbso[at]yahoo.com> wrote in message
news:1807c7b7.0411171113.7a3232dd[at]posting.google.com...
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I have a small farm, so if you will be gifting any children I'd like to sign
up for one or two because I could use the help. I can't give you a tax
deduction but I will be happy to send you some produce (ROTFLMAO)

Assuming you are talking about making a gift TO a child - Gifts are not
deductible.

However, if you operate a sole proprietorship you can legally employ your
minor child and pay them as an employee. Minor children employed by Sole
Prop parents are exempt from FICA and Federal Unemployment tax and usually
exempt from state unemployment tax and worker's comp. The payment to them
is deductible by your Sole Proprietorship.

The income to them would qualify them for an IRA account. You could
institute a SIMPLE IRA with your Sole Proprietorship, pay them $11,000, use
$8,000 to fully fund their SIMPLE Plan, have your business kick in an
additional $330. The kid also opens a ROTH and puts in $3,000. The kid
pays NO TAX and you get to deduct $11,330 on your tax return.

How's that sound?

The only catch is that you have to have a legitimate business operating as a
sole proprietorship AND you have to have a legitimate job for the kid.
Actually, the hard part is the legitimate business, the kid is easy. I once
had a client who used his 6 month old son as the company "spokesmodel" for
his advertising campaign.

Gene E. Utterback, EA

On Wed, 17 Nov 2004 14:09:49 CST, oitbso[at]yahoo.com (ron) wrote:

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There are some tax-related benefits (a good example is income shifting
as detailed in Tad's post), but the only honest-to-goodness up-front
deduction I can think of is a contribution to some 529 College Savings
Plans. That deduction is *limited* to state residents contributing to
their state plan, and the deduction is against income for State income
taxes, not federal. Best bet is to check with your state plan to see
if this is possible.

One caution: Grandparents who do this for grandchild #1 will find that
it is expected for #2, #3, etc. So go easy. <grin

-HW "Skip" Weldon
Columbia, SC

ron wrote:
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Ron,
This isn't quite the same thing as a tax deduction (you can't ever get
that for a gift) but you might consider a gift of "appreciated
property," if it results in a tax advantage vs. giving cash.

When you give someone shares of stock or a mutual fund, you also give
them your cost basis and holding period. So by giving away a stock or
mutual fund that has gone up a lot, you transfer the tax liability for
the gain to the recipient of the gift. Sometimes that results in low/no
taxes so you make gifts that way instead of in cash.

Imagine you have Microsoft at $0.10 per share and it's now worth $30 a
share. If you gave away 100 shares that's a gift of $3,000. The child
receives them at a cost basis of just $1.00 for the lot, meaning there's
a $2,999 unrealized capital gain, taxable when the shares are sold.

If YOU had sold the shares to make the gift, it would have been a $2999
long-term capital gain and I assume you'd pay tax on that.

If the child sells them...well, it might not be taxable at all. You need
to check it though because on the flip side it might be WORSE because
depending on the child's age and the amount of income, it may be taxable
to the parents. Google "KIDDIE TAX" for the rules on this.

But if you don't have kiddie tax issues you might end up up being able
to "give away" a tax liability, and end up with nobody paying those taxes.

[A similar thing comes up with charitable contributions...you can make
those with stocks/mutual funds that have big gains, that you've held
more than a year. You get a tax deduction for the full value of the
donation, but nobody pays the capital gains taxes.]

But to answer your main question, there isn't a way to turn a gift into
a deduction.

-Tad

To get by income tax, there is no way, to get around estate tax, a 529 plan
works.


"Rich Carreiro" <rlcarr[at]animato.arlington.ma.us> wrote in message
news:m3zn1gp5ae.fsf[at]animato.home.lan...
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oitbso[at]yahoo.com (ron) writes:

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No.

There's never a tax deduction or credit for gifts to any individual,
related or not.

[now, I suppose if real money were involved you could look into stuff
like charitable trusts with the grandchild as a beneficiary, etc., but
then you should be talking to a paid planner, not randoms in a
newsgroup :-]

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

Are there any ways to gift a child, or in this case a grandchild, that
would have tax advantages for me? The gift would be below the 11K
limit. I'm just wondering if there is some vehicle that would allow
me to deduct the gift from my taxable income, or better yet, taxes.
First time around with grandchildren, hence the questions...TIA, Ron