Discussion:Is this a gift?
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Discussion Forum Index --> Advanced Tax Questions --> Is this a gift?
Discussion Forum Index --> Tax Questions --> Is this a gift?
| 29 May 2008 | |
| Folks, A mother placed several million dollars into an LLC for investment purposes. She has gifted her two children 50% of her basis in the LLC. The son was gifted 27% and the daughter was gifted 23% as members of the LLC. The mother maintains 50% in the LLC. The CPA firm that set this up filed a gift tax return for the mother to report the gift. How can this be a gift? If I give you a gift of $10 you should be able to take the $10 as your separate property and spend it as you see fit. In this scenario the mother still has control of the use of the monies gifted. Is this a gift or an avoidance of tax for the mother?
Thank you, Malton 23:25, 28 May 2008 (CDT) Mike | |
| 29 May 2008 | |
| You can gift assets and still have control over them. Her kids can gift their % ownership to you if they wish with their mother still in control. | |
| 29 May 2008 | |
| Restrictions on the right to sell or use LLC property is ignored when valuing a gift of an LLC interest. See Internal Revenue Code § 2703(a)(2). | |
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