Does Wedding $ from Parents = Taxes and/or Issues??

  1. You have chosen to ignore posts from Txgrl82. Show Txgrl82's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    Thanks Txgrl - good to know!  My dad did do a treasurer's check so it looks like he would have been fine even if it was over the limit. On a totally different subject, I think my mother in law is under the impression that my parents are paying for most of the wedding.  In reality they're paying about 37% and I am paying 63%.  OF COURSE I am grateful to them, but I wish there was a not-so-lame way of telling her I am taking care of myself!!!
    Posted by framerican51008


    You know what they say about those who assume...She'll figure it out on her own...or maybe have LLJ make a reference to it when he speaks with her?
     
  2. You have chosen to ignore posts from lucy7368. Show lucy7368's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    Not my expertise, but I imagine that the bank might have to report to the IRS if they received a single check for deposit that exceeded the $13K amount.  Which might trigger an audit of the giver and/or recpient of the funds. 
    Posted by ALF72


    When I worked at a bank, we had no such requirement. 

    Technically speaking, if your mom wrote a check directly to the caterer, it's still a gift to you.  "You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return."  Since the caterer is performing a service for you, not your parents, it's a gift if they pay.
     
  3. You have chosen to ignore posts from lucy7368. Show lucy7368's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    The bank has to report it to the government if you withdraw over 10k, so I imagine that is how the giver would get caught if you will.
    Posted by framerican51008


    That's only if you're withdrawing more than 10k in cash.  The bank also has to report if you deposit more than 10k in cash - basically, the government wants to check to see if you're a drug dealer or something.
     
  4. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    When I worked at a bank, we had no such requirement.  Technically speaking, if your mom wrote a check directly to the caterer, it's still a gift to you.  "You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return."  Since the caterer is performing a service for you, not your parents, it's a gift if they pay.
    Posted by lucy7368


    Well, it's a gift to you, but by paying the caterer they are getting something rendered of value, so it's not a gift as between the caterer and your parents. It's payment for services rendered.  Thus, there would not need to be a tax reporting. I believe there are different regulations for business and for individuals re the $13k limit. 
     
  5. You have chosen to ignore posts from lucy7368. Show lucy7368's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    Well, it's a gift to you, but by paying the caterer they are getting something rendered of value, so it's not a gift as between the caterer and your parents. It's payment for services rendered. Posted by ALF72


    Right - it's a gift to you.  So your parents have to pay a tax on it... if all the checks, added up, exceed the amount of the exclusion.

    Pub. 950 lays it all out.
     
  6. You have chosen to ignore posts from pinkkittie18. Show pinkkittie18's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    but how does the bank or IRS know that the caterer isn't rendering services to your parents?
    Your parents are hosting the party and they are inviting people and they will be eaing the food. It seems like the caterer is serving them in some respects.

    Right - it's a gift to you.  So your parents have to pay a tax on it... if all the checks, added up, exceed the amount of the exclusion. Pub. 950 lays it all out.
    Posted by lucy7368

     
  7. You have chosen to ignore posts from Txgrl82. Show Txgrl82's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    but how does the bank or IRS know that the caterer isn't rendering services to your parents? Your parents are hosting the party and they are inviting people and they will be eaing the food. It seems like the caterer is serving them in some respects.
    Posted by pinkkittie18


    I think at this point lucy is saying it has nothing to do with the bank, it's directly related to the IRS at this point. If, by chance, you get audited, they look at your banking records and see a large transaction that is not typical to your account, they will pull that check and see who it was paid to. How often do people write huge checks to country clubs and the like?

    Plus, the fact that the daughter of so and so got married is published in the local paper. For the IRS it wouldn't be that hard to figure out.


     
  8. You have chosen to ignore posts from pinkkittie18. Show pinkkittie18's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    I didn't have a wedding announcement published. No one I know reads the paper, they go online. guess that's why the Globe's going belly up!

    I mean I know they could call the CC, but since you could say you hosted the party, then isn't it really a service rendered to you?
    I mean 15k for a wedding gown, yeah, you can't talk your way of that, but the food seems like it could be a loop hole of sorts.


    I think at this point lucy is saying it has nothing to do with the bank, it's directly related to the IRS at this point. If, by chance, you get audited, they look at your banking records and see a large transaction that is not typical to your account, they will pull that check and see who it was paid to. How often do people write huge checks to country clubs and the like? Plus, the fact that the daughter of so and so got married is published in the local paper. For the IRS it wouldn't be that hard to figure out.
    Posted by Txgrl82

     
  9. You have chosen to ignore posts from helphelpImbeingrepressed. Show helphelpImbeingrepressed's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    Man, being middle-class is way too much effort.
     
  10. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    Right - it's a gift to you.  So your parents have to pay a tax on it... if all the checks, added up, exceed the amount of the exclusion. Pub. 950 lays it all out.
    Posted by lucy7368


    Damn.  All I can say is thank God for gift splitting.  And for trusts.  lol. :-)
     
  11. You have chosen to ignore posts from lucy7368. Show lucy7368's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    but how does the bank or IRS know that the caterer isn't rendering services to your parents? Your parents are hosting the party and they are inviting people and they will be eaing the food. It seems like the caterer is serving them in some respects.
    Posted by pinkkittie18


    I am assuming that I am talking to a group of honest people who wish to avoid jail and fines.  With that in mind, the IRS knows about the gift because you tell them.  There's a space on your tax return where you report gifts, and you sign your tax return under penalty of perjury.  So, every year, the IRS knows exactly how many gifts you have given, and for how much.


    I mean, I'm not judging, and I personally don't care what you do - I'm just saying what the law is.  The general theory is that people report gifts on their tax return, because it's illegal not to.

     
  12. You have chosen to ignore posts from pinkkittie18. Show pinkkittie18's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    yeah, I'm wishing to avoid fines and jail...

    I guess if I have a daughter, her wedding fund's going right into the mattress.

    I am assuming that I am talking to a group of honest people who wish to avoid jail and fines.  With that in mind, the IRS knows about the gift because you tell them.  There's a space on your tax return where you report gifts, and you sign your tax return under penalty of perjury.  So, every year, the IRS knows exactly how many gifts you have given, and for how much. I mean, I'm not judging, and I personally don't care what you do - I'm just saying what the law is.  The general theory is that people report gifts on their tax return, because it's illegal not to.
    Posted by lucy7368

     
  13. You have chosen to ignore posts from lucy7368. Show lucy7368's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    yeah, I'm wishing to avoid fines and jail... I guess if I have a daughter, her wedding fund's going right into the mattress.
    Posted by pinkkittie18


    Just give her $1,000 per month, every month, until she's ready to get married.  No worries, no taxes!

    ....In about 20 years, $210k should pay for a wedding, right?  RIGHT??
     
  14. You have chosen to ignore posts from pinkkittie18. Show pinkkittie18's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    only $210K??? but what about the live swans I want? And the series of ice sculptures depicting every milestone inour relationship?

    lol, only seriously, if my daughter turns into a bridezilla, I'd admit I was a failure and commit hari-kari.

    Just give her $1,000 per month, every month, until she's ready to get married.  No worries, no taxes! ....In about 20 years, $210k should pay for a wedding, right?  RIGHT??
    Posted by lucy7368

     
  15. You have chosen to ignore posts from WhirledPeasPlease. Show WhirledPeasPlease's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    I didn't read this whole thread, but my dad is a CPA and there's a clause about a parental "gift" that you don't have to pay taxes on...and, like Kar said, there are ways to get around this anyway (not that my dad ever encouraged swindling the IRS...but I'm not gonna lie, I'm kind of okay with it). Talk to your accountant and s/he should be able to help you with this. 
     
  16. You have chosen to ignore posts from WMegs5. Show WMegs5's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    I didn't read this whole thread, but my dad is a CPA and there's a clause about a parental "gift" that you don't have to pay taxes on...and, like Kar said, there are ways to get around this anyway (not that my dad ever encouraged swindling the IRS...but I'm not gonna lie, I'm kind of okay with it). Talk to your accountant and s/he should be able to help you with this. 
    Posted by WhirledPeasPlease


    I worked in this field as a law student, and I'm going to be a estate planning attorney in a few months -- The $13k/year restriction is per donee so your parents can combine (called gift-splitting) to give a non-taxable $26k to you and $26k to your husband each year.

    Generally speaking, if your parents give you a gift as an adult over $13,000 (were you do not have to file a gift tax return) for tuition expenses and medical bills paid directly to the hospital then it is NOT considered a gift.  They can pay for clothing, food, room & board, ect. as a minor, but when you become an adult it is a taxable gift. In general, it is a very good idea to file a gift tax return Form 709 because there are significant estate tax consequences if you don't. 

    To those who are concerned, your parents probable do not have to pay a gift tax even if they are over the $13k/year.  Every person has a lifetime gift exemption of $1 million.  That means that even if your parents are over $13k/year for one or $26k/yr for both, you do NOT actually pay taxes on the gift even when you file a return unless your parents have given over $1M total in gifts over their lifetime.
     
  17. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    I worked in this field as a law student, and I'm going to be a estate planning attorney in a few months -- The $13k/year restriction is per donee so your parents can combine (called gift-splitting) to give a non-taxable $26k to you and $26k to your husband each year. Generally speaking, if your parents give you a gift as an adult over $13,000 (were you do not have to file a gift tax return) for tuition expenses and medical bills paid directly to the hospital then it is NOT considered a gift.  They can pay for clothing, food, room & board, ect. as a minor, but when you become an adult it is a taxable gift. In general, it is a very good idea to file a gift tax return Form 709 because there are significant estate tax consequences if you don't.  To those who are concerned, your parents probable do not have to pay a gift tax even if they are over the $13k/year.  Every person has a lifetime gift exemption of $1 million.  That means that even if your parents are over $13k/year for one or $26k/yr for both, you do NOT actually pay taxes on the gift even when you file a return unless your parents have given over $1M total in gifts over their lifetime.
    Posted by WMegs5


    PLEASE tell me that paying for education does not count toward the $1 million lifetime gift, or if it does, that there is still gift splitting and it's $2 mill per couple. 
     
  18. You have chosen to ignore posts from WMegs5. Show WMegs5's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    PLEASE tell me that paying for education does not count toward the $1 million lifetime gift, or if it does, that there is still gift splitting and it's $2 mill per couple. 
    Posted by ALF72


    It's not totally cut and dry since parents technically don't have a legal obligation to pay their kids' college education.  Private school for a minor definitely does not count.  You do still have a $2M lifetime exemption for a couple so each parent may give $1M total in their lifetime to their child.  Should they be so lucky :)
     
  19. You have chosen to ignore posts from ALF72. Show ALF72's posts

    Re: Does Wedding $ from Parents = Taxes and/or Issues??

    Good to know.  Thanks. :-) 
     
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