- quote -

Income to the PARENT not the son.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"Howard Kaikow" <kaikow[at]standards.com> wrote:
[snip]
- quote -

Thought the imputed interest would be considered (1) taxable
income to the father, and (2) taxable gift from father to
son. There are cutoffs of $10,000 or $100,000, depending on
whether the son has investment income, that may allow the
loan to be ignored. It gets messier if the loan isn't
structured as a demand loan: then the interest over the life
of the loan is an upfront gift and more likely to exceed the
gift tax threshold.

--
Chris Green

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- quote -

If not a gift, would not the IRS consider the imputed
interest that you son pays on the loan income to him, if the
interest rate is less than the market rate?

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Phil Marti wrote:
- quote -

And if he behaves himself, you can forgive him the debit as
a "gift" up to 11000$ per year.

ChEAr$,
Harlan Lunsford, EA n LA

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"Mikey D." <1312313[at]312.321.312> writes:

- quote -

If you sold your house, and made over $250,000 profit
($500,000 if married filing jointly) and you had lived in it
for 2 out of the 5 years prior to its sale, you'll owe no
tax and won't even have to report the sale on your federal
tax return. You may give your son up to $11,000, each year,
without any gift tax consequences. You may give an
additional $11,000 to any # of beneficiaries (his wife,
children, etc) without there being any gift tax
consequences. If you exceed the $11K amount, for any
beneficiary, you'd have to file a gift tax return. If taxes
ever become due, it is you who would have to pay them.
Unless your estate, and lifetime giving exceed $1,500,000
(if I remember correctly, under current law) there will be
no gift tax to pay. Gifts are not deductible unless they
are made to organized charities.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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"Mikey D." <1312313[at]312.321.312> writes:

- quote -

First you have to decide whether you want to give him the
money or loan him the money.

There are no income tax implications to a gift. No income
to anyone; no deduction for anyone. If you alone gave your
son alone (either directly or by paying off the car loan)
$30,000 YOU would be responsible for filing a gift tax
return, although you probably would owe no payment.

If you loan the money to your son, put it in writing, along
with the repayment terms. Whether you charge interest or
not is your business. If he does pay interest, that's
interest income to you; no deduction for him. No gift tax
implications to a loan of this size.

Phil Marti
Topeka, KS

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He is employed, but still owes $30K for his car. I just sold
my very nice house so I figure I'll pay off his loan so he
doesn't have any interest and he can pay me a little each
month. Now, if I write a check to the bank that loaned him
the money, would I have to pay taxes on that check? What if
I just gave him the money in cash or a check to his bank?
Would I pay taxes on that? Is there any possible way to
deduct this gift since I just sold my house and have to pay
plenty in taxes already. Thanks.

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