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June 05, 2007

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the very fact that there's a tax on gifts (money you've probably already paid taxes on anyway) just proves how crazy our tax system is.

What I am having a hard time understand is how does IRS know that you gave away $13,000 (or $25,000 for married) and now you owe gift tax on $1000 in that calendar year. Money moves so rapidly between accounts in the US for most people that it has to be difficult. I have asked Financial Planners and Advisors and NEVER ONCE gotten a good answer.

I am not saying that we lie. I'm just saying that all this hoopla about NOT being able to give money to our own family without someone looking over our shoulder!!!!!! How ridiculous is that. I will probably buy Gold coins and give it to my kids who can then cash them out of dump them into their account!!!!!!

Hope you can help.....

Kenny

Kenny --

They know because you report it -- just like you report your income, deductions, etc. It's a little thing known as "the law." Now if you don't like it, you can work to elect people to eliminate the reporting/constraints, but until then, you must report.

So can you give more than one person 24 thousand? Say there is a family of five and me and my husband give 12 thousand to each family member?

Katie --

You can give away as much as you like -- there will just be taxes on the amount over the $13,000 (the gift tax exclusion amount for 2009) you give each person.

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