How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

I have been given 10K cash, is it better to deposit into my

Customer Question

I have been given 10K cash, is it better to deposit into my newly formed company or into my personal account? Which will minimise the tax deducted?
Submitted: 11 months ago.
Category: Tax
Expert:  Lev replied 11 months ago.

In the US - gift - is not taxable income for the recipient and you do not need to report it on the tax return.

There is no any amount limit.

It does not matter how the gift is transferred - as long as that is a gift - there is NO income tax liability.

It doesn't matter HOW the gift is used - you may spend it for personal purposes or invest into your business - it is not taxable.

.

Please see for reference IRS publication 525 -

http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you...

Another issue with gift tax...

Regarding your situation - if the donor (gifter) is an US person - the gift is reported on the gift tax return. The gift below $14,000 is not taxable gift but when the gift is above that threshold - it is reported on the gift tax return - form 709.

Regardless - there will NOT be any gift tax liability as long as the lifetime limit is reached - that limit is $5,430,000 for 2015.
Any questions?

Customer: replied 11 months ago.
if I put it in my personal account, it is not considered earnings? If I put it in my business account an llc is there different implications?
Expert:  Lev replied 11 months ago.

The gift is NOT taxable income - and REGARDLESS how proceed are used - you would not report it on your tax return.
You may deposit into your personal account OR you may open a business and deposit into business account - there woudl NOT be any difference.
The gift is NOT earnings - you did not earn it.

What is considered a gift? Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

So - no difference.

Expert:  Lev replied 11 months ago.

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.

Related Tax Questions