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Old 05-07-2017, 06:47 PM
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pastor with a question (dilemma?)

a church I serve is gifting myself and family proceeds from land they'd sold (in lieu of a raise, which they simply can't afford to do). I'm simply paying off debt for the most part. Don't have a lot, but don't make a lot, so this is going to help very much.

my question is this, and forgive my ignorance. I truly don't know. but if they pay any debt I have directly (by which I simply mean from their account to any debt-holders of mine), must I record this as income?

Thanks so much for any help! I'm hopeful to have this remedied asap! I just don't want to spend too much of this money, even on eliminating debt, and then get nailed next year with a tax burden I could've accounted for right now. Thanks again!

-Drew



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Old 05-08-2017, 11:34 AM
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Quote:
Originally Posted by Drew_W View Post
a church I serve is gifting myself and family proceeds from land they'd sold (in lieu of a raise, which they simply can't afford to do). I'm simply paying off debt for the most part. Don't have a lot, but don't make a lot, so this is going to help very much.

my question is this, and forgive my ignorance. I truly don't know. but if they pay any debt I have directly (by which I simply mean from their account to any debt-holders of mine), must I record this as income?


No I don?t think so;youa re a done a recipient that has no tax liability. any method of paying for someone else?s mortgage/debt would qualify as a gift. In the US, if you give someone a certain amount of money without receiving a service in return, you become liable for the gift tax. The gift tax is the U.S. government?s way of preventing people from avoiding income taxes by giving away all of their money. The gift tax kicks in once your annual monetary gifts exceed a certain value. As of 2016~2017 whatever, an individual can give up to $14k in gifts each year to any number of individuals without being liable for a gift tax. That means if you have three children and you want to give them money, you can give them each $14k per year without having to pay any gift tax.A couple can give up to $28k per year to any number of individuals without paying federal gift taxes. That means a couple can give $28k per year to each of their children/donee without having to pay any gift tax. For example, a father and mother could give a child / a done and their spouse $56k every year ($28k to two individuals).however once the gift amount exceeds $14K then the donor needs to file form 790 with the IRS due on or before April 15, 2014.;I mean aslognas the annual debt amount paid by them exceeds $2*k then they need to fiel form 709 with the IRS if not no they do not need to do anything and you as a done, do not need to pay tax on the gift.



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Old 05-08-2017, 01:29 PM
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Thank You!

First, thank you for the prompt and informative reply! I have a couple follow up questions with more specifics given just so you can more specifically reply to my situation...

The amount gifted is just over 49K. Of that, approximately 40K will be going immediately towards debt elimination. The side note to this is (perhaps unfortunately?) I've now received and deposited about 41k into my account, and 8k in cash to procure a vehicle (as mine is a falling apart 2000 Chrysler lol). I'm already uneasy that I've made a mistake doing this, but it's done, and just need to know what to do from this point...

again, thanks SO much for any and all help, and certainly for your time!

-Drew



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Old 05-08-2017, 06:59 PM
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Quote:
Originally Posted by Drew_W View Post
First, thank you for the prompt and informative reply! I have a couple follow up questions with more specifics given just so you can more specifically reply to my situation...

The amount gifted is just over 49K. Of that, approximately 40K will be going immediately towards debt elimination. The side note to this is (perhaps unfortunately?) I've now received and deposited about 41k into my account, and 8k in cash to procure a vehicle (as mine is a falling apart 2000 Chrysler lol). I'm already uneasy that I've made a mistake doing this, but it's done, and just need to know what to do from this point...

again, thanks SO much for any and all help, and certainly for your time!

-Drew
as mentioned previously as a donee a recipient, you are not liable for any tax on the gifted money however since the amt of the gift exceeds $48K, the donor needs to file the ofrm 709 with the IRS.



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