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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
Satisfied Customers: 585
Experience:  10 years experience
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I have an elderly family member who would like to help me purchase

Customer Question

I have an elderly family member who would like to help me purchase a lot. He is willing to give me $100,000 and has no expectation of repayment or return. I would put the money into an LLC that I already have set up. He has already gifted me $14,000 this year. I'm wondering how to put the money into the LLC. As a loan? Or make him a member with a % ownership? To be clear, he doesn't want the money back.
Submitted: 2 years ago.
Category: Tax
Expert:  Lane replied 2 years ago.
Hi,There's no reason not to simply treat this as a gift, also. (By definition, if he expects nothing in return, it IS indeed a gift) The lifetime exclusion is at $5,430,000 (for those dying in 2015) and increasing every year ... so even though he would have to file a gift tax return for that amount over $14,000 ... it's simply an informational return that tracks against that 5Mil+ exemption AND if he is married, with the new portability rules, the couple can pass TWICE that to the next generation without any estate tax issues. Will he potentially have an estate tax? (gift PLUS remaining estate being over $5mil)? Let me know and we can go from there...
Customer: replied 2 years ago.
I don't know. I suspect he will have an estate tax, but I know he has tax planning in place. So, he can just gift it to my LLC?
Expert:  Lane replied 2 years ago.
OK, I still don't see you coming into the chat here ... I'll pause the timer, so just answer won't charge you for more chat time.But to quickly addres your specific questions ... IF you make him a member owner) then he must share in the profits and losses of the LLC if there are any and this will not really reflect what it is; a gift THe loan would be a similar issue ... with a loan there IS an expectation of repayment AND you could get into imiputed income isses with IRS (where they will epect him to payntax on interest even if you are not paying it (imputed income) So, unless there are estat tax issues wich that this needs to be removed from his estate for federal ESTATE tax issues, (without knowing more) I'd recommend that he simply gift the money to you (single member LLC is a disregarded entity for tax purposes, so whether he gifts it to you or your LLC, there would still be no gift tax UNLESSS he has already gifted away more than the exemption equivalent (agaon,
Expert:  Lane replied 2 years ago.
Sorry was in the middle of that second post Yes he can gift to you OR the LLC ... as far as IRS is comcerned it's you ... single memnber LLC is a disregarded entity for tax purposes
Customer: replied 2 years ago.
ok thanks.
Expert:  Lane replied 2 years ago.
He can gift to you and you contribute to the LLC OR he can gift directly
Expert:  Lane replied 2 years ago.
You're very welomeYour positive rating (using the smiley faces at the bottom) would be thanks enough! … That’s the only way I’m credited for the work here