Tax experts.. Need input on an issue

[anonmouseuser]

A relative is planning to transferring about $40K to my acct. I want to know if I need to declare this amount when I file my taxes and if so, at what rate will this "income" be taxed?

Thanks.

 

[DaWhim]

iirc, banks have to report every cash transaction that's bigger than 10k. how about transfer 5k each time so you don't get attention?

 

[Orsorum]

... Is it a bona fide gift or payment for services rendered (or some other consideration)?

If it's a gift, you're not liable for any tax (gifts are not taxed to the giftee), but your relative *may* be liable for gift tax. If I were your relative I would consult a CPA in his state.

I THINK what DaWhim proposed is illegal, but I cannot provide a citation off-hand.

 

[anonmouseuser]

Originally posted by: Orsorum
... Is it a bona fide gift or payment for services rendered (or some other consideration)?

If it's a gift, you're not liable for any tax (gifts are not taxed to the giftee), but your relative *may* be liable for gift tax. If I were your relative I would consult a CPA in his state.

What DaWhim just proposed is illegal and is watched for by banks (by law).

I found some useful information here.

 

[webcammie]

Originally posted by: anonmouseuser
A relative is planning to transferring about $40K to my acct. I want to know if I need to declare this amount when I file my taxes and if so, at what rate will this "income" be taxed?

Thanks.

If you don't want to be taxed, transfer 11k because they can give up to that much without them being taxed. Or their spouse can also give you that much -- 22k. Then they can transfer the money to your two other siblings -- 8k for one and 10k for another and they can transfer that money to you.

Then again, I am no CPA so take my advice very lightly.

 

[Minjin]

Originally posted by: Orsorum
... Is it a bona fide gift or payment for services rendered (or some other consideration)?

If it's a gift, you're not liable for any tax (gifts are not taxed to the giftee), but your relative *may* be liable for gift tax. If I were your relative I would consult a CPA in his state.

What DaWhim is proposing is NOT illegal, sorry about that. But it may invite further scrutiny by the bank and regulatory agencies.

You were right the first time. Structuring transactions such that they are under the $10,000 mark IS illegal. Difficult to prove? Yes, but still illegal.

Mark