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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29786
Experience:  Taxes, Immigration, Labor Relations
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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: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year 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 -

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 1 year 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 1 year 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 1 year ago.

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