Jack wrote:

- quote -

YOU would need to file a gift tax return. It wouldn't
subject HIM to taxation.

- quote -

Same filing requirements. You're still making him a gift.
It's less likely to be detected, as a lot of people make
mortgage payments, but there's no difference in law.

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Oxnard[at]webtv.net (Jack) wrote:

- quote -

You sound like a very nice brother. Need another sibling? :-)

- quote -

Any amount over $11,000 in a given year would constitute a
"taxable gift", but there would be no tax consequences to
HIM. YOU, as the donor, would be subject to filing a Gift
Tax return (form 709) and YOU might have to pay any gift
taxes due. The recipient of a gift is never subject to tax
on the gift amount.

- quote -

Still a gift, and still reportable by you.

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Oxnard[at]webtv.net (Jack) writes:

- quote -

You presume incorrectly.

Gifts are not income to the recipient. This action would
require that YOU file a gift tax return (Form 709) and use
some of your unified credit. It wouldn't cost you any cash,
but you would reduce your available lifetime exclusion from
estate and gift taxes.

Phil Marti
Clarksburg, MD

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Jack <Oxnard[at]webtv.net> wrote:

- quote -

Both are gifts, and gifts are never taxable to the recipient
of the gift.

The donor, you, would have to file a Gift tax declaration
form 709, and redcuce your lifetime Gift & estate tax
exemption amount, which could mean this is a bad idea.

And since you are not an owner of the house nor obligated to
pay the mortgage, you cannot deduct the mortage interest (or
property taxes.) A local tax professional should be able
to help you come up wih an arrangement that is more
beneficial to you.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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- quote -

A gift to your brother has no income tax impact on him.
It's free and clear money to use as he sees fit. You,
however, would need to file a gift tax return for the amount
exceeding $11,000 per year. As long as this gift, plus other
taxable gifts over the years, does not exceed $1,000,000 you
won't have any gift tax to pay. If your estate is likely to
exceed $1,500,000 this could affect your heirs, though.

I'd suggest meeting with a tax pro to make sure you've
covered all the bases.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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"Jack" <Oxnard[at]webtv.net> wrote:

- quote -

A gift is not subject to income taxes (at either the Federal
or state level). It is, however, subject to gift taxes.
You, as the donor, are the one who would need to file a Form
709 (Federal gift tax return) to report that you have GIVEN
a gift of more than $11,000 this year to your brother. You
will NOT pay gift tax yet, however, unless you have already
given more than one million dollars worth of "taxable"
gifts. And it would still be a gift if you made the check
out to his mortgage company, so that scheme does not avoid
the filing the gift tax return.

Vida Freeman, EA

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- quote -

You are a great brother. Hope he realizes how good you are!
Saying that, he has nothing to worry about with federal and
state tax issues. YOU, on the other hand, will have to file
a gift tax return and reduce your life/death time gifting
amount.

- quote -

Same answer.

Helen, EA in PA
Director, NAEA; Immediate Past President, PSEA; Tax Expert, AOL
Enrolled Agents - THE Tax Professionals

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Oxnard[at]webtv.net (Jack) posted:

- quote -

Absolutely no tax due for your brother. You are a Prince of
a fellow, and you will not create a tax problem for the
recipient. Nothing even for him to _report.

The issue comes on _your side of the ledger.

- quote -

It really doesn't matter how you award the gift to your
brother -- directly or indirectly. There will be no Federal
Income Tax due. (I can't speak for CA, but most states tie
their income taxes to the Federal return ... so since your
brother has nothing to report, probably no problem.)

However, there will be estate tax issues for you, and the
best advice would be for you to consult your financial
advisor and/or your attorney.

Bill

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Jack wrote:

- quote -

If a gift it will be subject to gift tax even if the payment
is made directly to the mortgage company.

No gift tax will be currently due, however, unless you have
already made taxable gifts in your lifetime of more than
$1,000,000.

Perhaps a better way to handle it would be to lend him the
money. You will be required to charge interest, but can
then forgive repayments of up to $11,000 per year without
incurring gift tax. If you do that you may have some
taxable income to the extent you forgive interest.

Stu

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My brother has fallen on hard times and I wish to help him
by paying off most of his home mortgage.

If I send him a check for $150,000, presumably this would be
a gift and subject him to State and Federal Tax.

But if I made the check out to his mortgage company,
allowing him to make the last few payments, would this
constitute a gift (or even be detectable by the IRS)? I
wish to avoid him (or me) being additionally burdened. We
live in Calfornia.

Thanks for any advice.
Jack.

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