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Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2365
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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We are a family of husband , wife and 11 yrs old son living

Customer Question

We are a family of husband , wife and 11 yrs old son living in US on US Green Card . Please clarify the below :

(1) If the unearned income of my 11 yrs old kid is less than $1000 in a year (assuming there is no other any type of income to the kid) , neither the kid nor the parent need to report it anywhere in any income tax return , .........................is that correct ?

(2) As i know that either a US Green Card Holder or a US Citizen can give gift of $13,000 to each person each year without filing Gift Tax Return or reporting anywhere including his Income Tax Return , ................ am i correct ?

(3) As i know there is no such limit of $13,000 between husband & wife whether they both are GC Holders or US Citizens , ................. am i correct ?

(4) Does this limit of $13,000 also apply when a parant gifts cash to deposit in kid bank account of my 11 yrs old son when both (parent & kid) are US Green Card Holders ?

(5) Is any difference in the rules of Gifts in cash or kind in the 2 situations (i) when gift giver and taker both are US Green Card Holders , and (ii) when gift giver and taker both are US Citizens ?
Submitted: 3 years ago.
Category: Tax
Expert:  Anne replied 3 years ago.

Anne :

Hi

Anne :

Thank you for your question.

Anne :

question 1-as long as your child's UNEARNED income (meaning interest dividends, capital gains) is < $1900, and he has NO OTHER income (such as a paper carrier for instance) then you're correct, there's no reason for the child to file.

Anne :

question 2-You may actually "gift" up to $14,000 in 2013. However keep in mind that if there was any gift tax due the giver, not the recipient would be responsible for paying any tax due.

Anne :

Additionally, "gifting" someone cash does NOT relieve you of having to pay tax on that money. You are still responsible for reporting and paying tax on world wide income.

Anne :

question 3-You're correct that spouses can not "gift" money to each other .....and since the person who earned the money must pay tax on the total $ amount they receive, there would be no tax break there annyway.

Anne :

question 4-yes, you are still subject to the $14000 gift limit (unless you choose to give more, at which time you would have to file Form 709 Gift tax form.

Anne :

If you are going to open an account in the name of a minor, you will want to list his SS# first on the account. The person listed first is the responsible party when it comes to paying tax on any interest the money may have earned.

Anne :

question 5-No, there's no difference in the tax treatment of a Green Card holder as opposed to a US citizen

Anne :

I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.

Customer :

Sorry , my question was for LEV ...........

Anne :

No where did I see that, so please accept my apology...............If you put the name of the expert you would like to answer your question on the question line, then most of us generally steer clear of those questions, knowing that the expert, if not online at the moment, will be on line soon.

Anne :

Again, please accept my apology

Customer :

No Problem , thanks ............

Anne :

You're welcome