Gift Tax

[bstaxes]

Client wants to take money from IRA to help his child buy a house. He would like to avoid gift tax.

Question 1- can he and his spouse give 12000 to the child and the child's spouse (48000) and can he give 12000 to each of their minor children and avoid the gift tax?

Question 2 - could he write the check to the mortgage company and avoid the gift tax?

TP knows he will pay tax on the withdrawal of the IRA.

This has to be my year for IRA withdrawls. I guess it because of the economy. Anybody know any good IRA courses I could take for next year?

Thanks

[lbbwest]

Client wants to take money from IRA to help his child buy a house. He would like to avoid gift tax.

You haven't given any information that indicates he WOULD be subject to gift tax, if this is his first time gifting he will at worst case analysis utilize some of his unified credit. What is the total amount of his estate? Are you sure he is subject to gift tax? Don't forget his spouse's unified credit utililization on marital property (which would NOT include HIS IRA)

Question 1- can he and his spouse give 12000 to the child and the child's spouse (48000) and can he give 12000 to each of their minor children and avoid the gift tax?

The $12K you are referring to is the yearly limits I haven't looked up the limits for 2008.

Question 2 - could he write the check to the mortgage company and avoid the gift tax?

Yes if child and child's spouse were sole owners.

TP knows he will pay tax on the withdrawal of the IRA.

How old is client? IF he has assets large enough to make him and his spouse eligible for estate/gift tax why on earth would they withdraw assets from his IRA to make the gift?

This has to be my year for IRA withdrawls. I guess it because of the economy. Anybody know any good IRA courses I could take for next year?

Thanks

[bstaxes]

The client's assets are all in retirement funds (stocks) through his work. His only other assets is his home there is no ready cash available. He is 67 and retired. the spouse is also retired. He would use most of his unified credit. He wants to be fair to his other children.