BGull wrote:
- quote -

Sure does make a difference, because with an IRA she would
be in big trouble. But a regular old annuity, NO problem.
(whew!)

The money was a gift, and it was up to the giver (not the
"giftor!" lol) to do the necessary paper work, i.e. gift tax
return.

ChEAr$,
Harlan Lunsford, EA n LA
Wed 26 Jan 2005

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"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

Well I have more info - Mom has the money in an annuity NOT
an IRA. Does this make a difference?


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BGull wrote:

- quote -

Yes: 6% of the excess contribution in the IRA for each year
an excess amount remains in the account, at a minimum.

If Tennessee is a "common-law marriage" state, that could
affect the outcome.

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"BGull" <bgull[at]eircom.net> writes:

- quote -

Do-it-yourself-estate planning strikes again. While a
properly drawn will would have taken care of everything,
your mother's gentleman friend really screwed the pooch, and
now your mother is paying the price. At least she's doing
one thing right--the tax preparer doesn't need any
information from her to prepare the decedent's return.

I don't remember how much money we're talking about, but if
your mother "elected" to make IRA contributions in excess of
what she was allowed ($2,000 per year until recently), she's
got a big tax problem.

Your mother may eventually need a lawyer to deal with the
daughter, but right now I'd get her off to a tax
professional ASAP.

Phil Marti
Clarksburg, MD

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BGull wrote:

- quote -

First of all, thanks so much for your clarification. You
have probably seen what wild ASS-umptions we all make at
times.

Now, if her social security number is needed for gift tax
purposes, as I suspect, then the preparer of said return
simply omits the number; she can do nothing else of course.
And if IRS needs it, you're right, it's up to them to
inquire. Certainly however, the gift tax return will
include your mother's last known address.

- quote -

And that was a real NO NO! AS others have pointed out, only
a worker can put money into an IRA, and even that yearly
amount is limited (3,500$ last year for 2004). I can't
believe really that if she did this, the IRA custodian at
the institution where she opened the account actually let it
slide through. Banks, etc know the limits; at least they
should. UNLESS they were led to believe it was a rollover,
and even then just transferring cash via maybe a check
would have put the bank on notice that all was not kosher.

Question then; how do you KNOW it went into an IRA?

I think your mom needs some really competent tax advice in
Tennessee. Or you should visit her and take her to somebody.
If you decide to do this, we on this board can find you
somebody qualified probably.

- quote -

Again, get local and competent help with someone on the ground in TN.

ChEAr$,
Harlan Lunsford, EA n LA
Fri 21 Jan 2005

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Stuart Bronstein wrote:
- quote -

Not necessarily. Traditional IRAs can have a non-deducted
basis.

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Thanks to all who responded but:
I actually wrote this for my mother - she lives in TN. I
live in Ireland. Her partner was a man. They lived together
for 25 years. His only daughter hired a tax person to
prepare his taxes and she called wanted to know my mom's SSN
because of the money she received. The tax person was told
to "go pound salt" and if the IRS needs the number they can
call - she is in the book.

My mom didn't consider it a gift. For 25 years they shared
everything - what was his was hers and visa versa. He knew
after his death this daughter would cause trouble so rather
than naming my mother in a will he just gave her the money
to live on, save or spend as she saw fit. She elected to
invest in an IRA account.

So, does my mom owe the IRS any money or explanation?

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Gary Goodman wrote:
- quote -

Exactly my sentiments, Gary.
People DO confuse gift/estate/income taxes all the time.

Harlan Lunsford

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- quote -

The U.S. Census Bureau does not agree:

[Extract]
Unmarried Couples
5.5 million
Number of unmarried-partner households in 2000. These
households consist of 4.9 million opposite-sex partners and
about 600,000 partners of the same sex. This is up from 3.2
million in 1990.
<http://www.census.gov/Press-Release/...00/000814.html
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kd6lvw[at]bde-arc.ampr.org says...
- quote -

Could it be that the estate is larger than the unified
credit? The family may think that the OP shoud pay his/her
"share" of the estate taxes. But then again, if the estate
is that large, they shoul have a tax pro handling this.

Gary

--
E-mail to the above address is rarely read. If you want to contact me
directly, please send an e-mail to: gary at gdgoodman dot com.

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"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

It has to do with what actually happened for the transaction.

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

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BGull wrote:

- quote -

For the original poster, whereever he/she may be.

I hate to think you're yanking our chain here, but I do
notice that your email is from an Irish (Republic of) isp,
however you write very "American". Perhaps you're an
expatriate?

And when you mention the term IRA, you don't mean Irish
Repulican army do you? Just a stray thought, I guess you
are talking about an individual retirement account after
all.

However, is yours an income tax question or a gift tax
question? The latter might arise when the family found out
about the gift and felt short changed when the balance of
the estate was insufficient to pay any taxes.

ChEAr$,
Harlan Lunsford, EA n LA

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D. Stussy wrote:
- quote -

What does that have to do with anything. No matter when
money went into an IRA, when it comes out, to a taxpayer or
his beneficiary, income tax is imposed.

Stu

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Barry Margolin wrote:
- quote -

Not necessarily. If they are in California and talking
about the new domestic partnership law, it also applies to
heterosexual couples as long as they are over 62.

Stu

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- quote -

I've never heard anyone refer to members of heterosexual
couples as "partners" -- if they're married it's "husband"
or "wife", if not it's "boyfriend" or "girlfriend" (although
I agree that this feels wrong when referring to the elderly,
and I have a hard time referring to the man my mother has
been living with since she became widowed as her boyfriend,
but I also wouldn't call him her partner). On the other
hand, this is the common term homosexuals use to refer to
their significant others. I don't think it matters what the
sex of the OP is -- I think the term is used by both gays
and lesbians.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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Stuart Bronstein wrote:
- quote -

That doesn't work either. Note that the gift was in the
year BEFORE death.

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BGull wrote:

- quote -

1) I don't see HOW you could put it into your IRA. You
would still have been over age 70.5 and are required to make
DISTRIBUTIONS..... It's not a rollover or conversion from
another qualified plan, and at best, it's an excess
contribution.

2) You don't have a tax. In the simplist form, it was a
GIFT, and since it exceeded $11k, the estate has to do a
gift tax return and lower its unified credit.

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- quote -

I detect no reference as to the gender of the OP. It might
well have been a heterosexual partnership. Not that it
matters.

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BGull <bgull[at]eircom.net> wrote:

- quote -

You can't put it into an IRA.

If it was a gift, you aren't required to do anything.

- quote -

If it was a gift, you don't owe any taxes on the money. He
might have in 2002.

- quote -

I don't believe the recipient of a gift is required to
report it. Nor are any taxes due from the recipient.

Seth

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Mike Lewis wrote:
- quote -

Nor can I. AT first like you, Mike, I thought in terms of
a partnership and form 1065. But that may just not be the
case.

At any rate, I will refrain from commenting on this
particular "partnership".

ChEAr$,
Harlan Lunsford, EA n LA

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