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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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My daughter needs to retain an attorney in New York and does

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My daughter needs to retain an attorney in New York and does not have money for the retainer right now. The total retainer is $30,000. I paid this for her using a personal credit card and the charge was processed directly by the law firm. Must this treated as a gift to my daughter from my husband and I for 2013 or can we treat it as a loan (to be repaid from her settlement)?

Megan C :

Thank you for your question. My name is XXXXX XXXXX I will be happy to help you

Megan C :

Do you plan on having your daughter pay you back?

Customer:

Yes, ultimately.

Megan C :

If so, you can treat this as a loan and no reporting is necessary

Megan C :

IF she's going to pay you back, then it's a loan.

Megan C :

No need to treat this as a gift

Customer:

Do we need any documents or is the agreement fine.

Megan C :

For that amount of money, I would type up a simple loan agreement, which just states she's to pay you back. You don't have to have a payment schedule

Megan C :

Just so you have it.

Customer:

And...what happens if she loses the case and can't pay back?

Megan C :

When you forgive the debt, then it's a gift. All you do is file the gift tax return (and who knows, by then it might be 15,000 per parent)

Megan C :

But, no gift tax is due unless you have given away more than 5.2 million during your life.

Customer:

Thank you very much.

Megan C :

You're welcome

Megan C :

Is there anything else I can help you with?

Megan C :

If not, please rate positive so that I may receive credit for assisting you today

Customer:

That's it. Thank you.

Megan C :

You're welcome. The rating feature is located along the bottom of the screen

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