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Normally a person receiving a gift will not pay taxes on the money received. Your grandfather may not be so lucky. The best alternative to potentially save your grandfather some taxes is to split the gift in 2. For 2012 the amount that could be give as a gift tax free was $13,000 per person. To save your grandfather some money. The check should be allocated $22,000 to your son, and $13,000 to you. That way only $9,000 of the amount can be considered above the limit.
Spending is not an issue as the recipient of the gift does not pay taxes on the gift.
For more information here is a link to the IRS publication that explains this:
This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.
As I stated my son is receiving financial aid by the way of a fee waiver for tuition. Will this gift interfere with his status?
If the application for the waiver includes amount of money from all sources that you have obtained then this could impact your waiver for the year the funds are received. To determine if this is the case and you would need to check with the financial aid office.
You might consider setting up a trust with yourself as the trustee and your son as the beneficiary. Strictly speaking the money would not be either of yours, the trust would own the money. As trustee you would control how the money is allocated to your son.
I was wondering if it was possible to hire you to set up the trust?
I was referring to the answer you gave me above. Do you set up trusts and if so, how much do you charge?
Thank you, I knew it was a long shot, but I liked your knowledge and directness. (My Mother made me ask). Attachments are only available to registered users.Register Here
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