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in 2004 I signed a promissory note w/my parents for 100k. The money was supposed to be a gift, but I signed the note because I was told the only legal way to "give" the money to me was to do it as a loan which they would "write off" over 5 years between them as a gift. I knew nothing about gift taxes at the time or the purpose for the note, and I certainly assumed that w/the need to make this "loan" so official that they would have to declare something on their taxes each year, decreasing the note each year like I was told. It's 5 years later now and I still have no sense of ownership over this money, is it true that nothing shows up anywhere except in my forgiveness letters decreasing this note each year?

Submitted: 58 days and 18 hours ago.

Category: Tax

Value: $15

Status: CLOSED

Accepted Answer

Hello ak,

Each year, every individual is allowed to give up to a certain amount in annual gifts without any reporting requirements.

In the years 2004 and 2005 that amount was $11,000. For the year 2006 through 2008 the amount was $12,000. And for the current 2009 tax year the amount is $13,000. What that means is that your mother and father could each give you gifts up to these amounts each respective year without any forms needing to be filed with the IRS. Because there are no reporting requirements for amounts that fall below the allowed annual threhhold, the only record you would have would be the forgiveness letters you received each year decreasing the note, as they would not have been required to report gifts under these amounts.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you ak.

Accepts:
Expert:	Merlo
Pos. Feedback:	99.8 %
Answered:	9/25/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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