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I put college money from grandparents for my daughter in an…

I put college money from...
I put college money from grandparents for my daughter in an account in her name and mine every year. When she was a wild sixteen year old threatening to clear it out and run away, I took her name off the account so she wouldn't have access. Now I'm filling out fafsa form which asks how much money I have in bank accounts. I'd like to open a new account in her name and transfer the money. Will this be viewed as a gift making me have to do a gift tax return? All of the money was given in checks written to her and under the allowable $14000 exclusion. But since it was in my name only for a time I may have muddied the waters. What should I do?
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Answered in 2 hours by:
1/21/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,530
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Hi. My name’s Lane …

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate,non-profit, and tax advice, to clients on three continents, since 1986.

Bear with me a moment while I type up my response. Then if you have further questions we can go from there

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For FAFSA purposes, it's better to have the asset in your name than hers.

...

So if reducing the EFC (Expected Family Contribution) is the objective, reporting things exactly as they are will generate the lower EFC ( more financial aid).

...

The lifetime gift exemption was just taken up to $11,000,000+ ($22,000,000 for couples) so gift/estate tax is likely not an issue.

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Although technically, a gift tax form should be filed for gifts over $14,000 ($15,000 in 2018) unless you think that the grandparents will have given over $22 million, there will be no actual tax paid. (gift tax form is just to track AGAINST that lifetime exemption)

...

I would report exactly aas things are today.

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For example, the Free Application for Federal Student Aid (FAFSA) bases the expected family contribution (EFC) on 20% of student assets but at most 5.64% of parent assets. So, it is always best to save for college in the parent's name, not the child's name.

...

And again, the grandparents liklely have no real benefit from it being out of their estate unless the estate is worth over $20 million.

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Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit"–That’s the only way I’ll be credited for the work.

I hope you’ll rate me based on my accuracy and thoroughness (as opposed to any good news/bad news content). Thank you!

..

But again, if you need more on this, please let me know.

Lane

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,530
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
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