$$ Gift to a Minor

[af1212]

My father is hoping to give us some $$ in the near future. In order to not exceed the gift limit he wants to split it between my H, myself and my daughter. Ultimately we would like to use this $$ for a home purchase. Does anyone know if there are restrictions on the money that will be given in my daughter's name?

[Deleted]

What? Are you saying that you want to use the money in her name for your home purchase? I would put it in a 529 personally.

[af1212]

Jul 29, 2014 15:25:40 GMT -5 @crackhabit said:

Your daughter might be kinda pissed off if she ever realizes what happened.

The money is only being given with the intention of using it for a down payment. The only reason he would give it in her name is to stay under the annual gift limit.

[lime]

Is he just trying to get around the annual gift exclusion limit?

You guys are either not understanding this or overthinking it.

Maybe this simple article will help. wills.about.com/od/understandingestatetaxes/qt/Gift-Tax-Exclusion-Annual-Exclusion-Vs-Lifetime-Exemption.htm

[mbcdefg]

Jul 29, 2014 15:25:40 GMT -5 @crackhabit said:

Your daughter might be kinda pissed off if she ever realizes what happened.

Our parents straight-up told us that they took money out of our savings accounts to buy our first house.

[af1212]

Jul 29, 2014 15:31:06 GMT -5 @missy1 said:

What? Are you saying that you want to use the money in her name for your home purchase? I would put it in a 529 personally.

Sorry - I should have been clearer in my original post.

 My father would like to give my husband and myself $$ for a downpayment.  He would like to be able to give us more than the annual limit to just my husband and I. So he was wondering if he could gift the rest to a third person - my daughter. The money is always being intended for a downpayment, he just wants to split it into 3 gifts to stay within the IRS limits.

Does anyone know if this can be done?

[af1212]

Jul 29, 2014 15:33:53 GMT -5 lime said:

Is he just trying to get around the annual gift exclusion limit?

You guys are either not understanding this or overthinking it.

Maybe this simple article will help. wills.about.com/od/understandingestatetaxes/qt/Gift-Tax-Exclusion-Annual-Exclusion-Vs-Lifetime-Exemption.htm

Thanks.

My understanding is that there are annual limits to the monetary amount of gifts made.  This year the IRS limit is 14000.  You can give 14000 to as many different people as you want, but you cannot give 1 person more than 14000 per calendar year.  So my dad could give me 14000 and my husband 14000 but if he gives either of us any more than that it will be taxed.

Which part do I have wrong?

[af1212]

Jul 29, 2014 15:38:15 GMT -5 @chloe77 said:

No one is going to tell you how to circumvent the law...

So there are legal restrictions placed on the money that is in my daughter's name? What are they?  Or can you point me in a direction where I can read about them?

TIA!

[SJ]

How much is he trying to give you total? Is he married?

If so, he can give you four times the annual amount (father to you, father to DH, father's spouse to you, father's spouse to DH)

He can do that every year.

He can also do the same to your daughter, but I would definitely not be comfortable immediately spending money in my daughter's name for a house as you are suggesting.

[SJ]

Jul 29, 2014 15:41:19 GMT -5 af1212 said:

Jul 29, 2014 15:38:15 GMT -5 @chloe77 said:

No one is going to tell you how to circumvent the law...

So there are legal restrictions placed on the money that is in my daughter's name? What are they?  Or can you point me in a direction where I can read about them?

TIA!

The funds must be used "for the use and benefit of the minor"

I cannot give you further interpretation or advice. I would personally not do what you are suggesting.

Google "using a minor's money" and you can read a variety of thoughts on the subject.

[Deleted]

Actually, I think you should talk to a loan officer. I don't know anything about gifting and taxes but I think it will be a problem to show adequate funds for down payment if you need to transfer money from your daughter's name. Even if you could do it, the loan may not go through.

[af1212]

Jul 29, 2014 15:45:40 GMT -5 SJ said:

Jul 29, 2014 15:41:19 GMT -5 af1212 said:

So there are legal restrictions placed on the money that is in my daughter's name? What are they?  Or can you point me in a direction where I can read about them?

TIA!

The funds must be used "for the use and benefit of the minor"

I cannot give you further interpretation or advice. I would personally not do what you are suggesting.

Google "using a minor's money" and you can read a variety of thoughts on the subject.

Thank you - this is helpful.  I have been reading information about custodial accounts, which seem to be very vague.  I will search again using your phrasing.  Thanks!

[msmerymac]

Are you going to be using the money ASAP? A work around would be for him to gift you more money in January.

[af1212]

Jul 29, 2014 16:34:24 GMT -5 msmerymac said:

Are you going to be using the money ASAP? A work around would be for him to gift you more money in January.

This was our plan all along but things are moving faster than we thought on the home buying front. I'm thinking it will still work out this way but my dad has started to look into different options in case we really want to buy this calendar year.

[lys]

If your father married? IF so- then he could gift maximum amount to you and DH and his wife could gift maximum amount to you and DH as well.

[af1212]

Jul 29, 2014 18:36:04 GMT -5 lys said:

If your father married? IF so- then he could gift maximum amount to you and DH and his wife could gift maximum amount to you and DH as well.

Nope.

[Deleted]

Can he just give you some now and some after the new year?

[anna7602]

Maybe I should put this one under flameful/scandalous, but given some of the comments I've seen on the boards about the horrors of raising kids without backyards or puppies or without their own bedrooms, I would have thought that a DP for a new house would qualify as something that "benefits the minor."