mkg wrote:

- quote -

Suze has a way of shouting a strategy which leaves with with
enough detail to be really confused. Your post appears to
mix a few different topics.

See http://www.irs.gov/taxtopics/tc553.html and download
http://www.irs.gov/pub/irs-pdf/p929.pdf

Today, your under 14 year old can have up to $1600 worth of
investment income without paying any tax. So you may gift
11k (and your spouse can, too for total of $22k) and then
sell to capture that $1600 gain each year, leaving the money
in child's name.

Over 14, the child's income, no matter how high, doesn't
roll over to your return, so his gains will likely cap at
the 5% long term cap gain rate. I don't quite know what she
was referring to by 2008. The exact numbers are changing,
but the kiddie tax typically has referred to the +/- 14yr
old issue.

This strategy is great to sell appreciated assets for the
child's higher education. You really can't legally take the
money back for regular expenses that you are liable for
(your own mortgage, food, etc.) One you gift it, it's their
money.

JOE

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I read today an articel by Suze Orman that if the investment
vehicle is transferred to Kids as gifts ( upto 11K /kid) and
hold on to it till 2008, the taxes on the capital gain
would be zero.

I suppose this is true but not sure. So Can I do the
followings..

Give the stocks or funds worth 11K to my kid and sell them
in 2008 or beyond, that way I will reduce my AGI and qualify
for less tax bracket.

And at the same time avoid paying taxes on the investment by
filing tax return on behalf of my child.

My child will be below 14 years in 2008.

Is this allowable by IRS?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >