Any bankers out there???

[dreamin_disney]

A co worker will be getting an inheritance in a few days. She wants to give some away to relatives. Whats the amount she can give away without bank holding it or reporting it to IRS. She says she know she has to report how much she gave away and to who but she wants the realtives to get the $$ right away for the holidays. Would it be best for her to write a personal check or give a cashiers check to each person? I think she said she wants to give each person $10,000-$12,000 .

another worker said to do cashiers check and the bank shouldn't hold it or report it but if she was to withdrawl that much cash then its reported .

I told her I opened a new savings account where I have my checking and deposited my 52 week challenge check for $1,378 and the bank held it for a couple of days. Don't know if it was reported to IRS though.


coworker just wants to know best senerio. wish I was on her list-lol!

 

[BridgetBordeaux]

not a banker...............not a CPA.................

The IRS has all the info you need on their website.

Meanwhile, here is a link to wikipedia

http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States

The present annual exclusion amount appears to be $14,000

I found the number here.............

http://www.irs.gov/Businesses/Small...oyed/Frequently-Asked-Questions-on-Gift-Taxes

added--- the whole 10,000 size transaction issue regarding banks should really not be a big deal. The whole reason for reporting the 10K or higher transfers is to look for evidence of money that might be involved in crimes. Don't worry about the 10K threshold for reporting..............an inheritance and any related gift giving is pretty normal, and won't get anyone in trouble with the law!

 

[Kingdome8]

A cashier check is gaurenteed funds.
If u deposit it in your bank the bank will def clear
5k that night. The rest can be held like a regular check. (Depending on your relationship). If u bank at same bank as cashier check is drawn, never a hold

 

[Shelly F - Ohio]

The bank is required to report $10K transactions that involve cash. Such as coming into the bank with $10k in actual cold hard cash and wanted to deposit it. Or withdrawing $10k in actual physical cash and walking out with it. They are looking for drug money transactions.

 

[*pixie*dust*]

You are actually talking about several different issues:

1. Check Holding -- this will depend on the institution and the relationship the depositor has with the institution

2. Reporting to the IRS-- Cash amounts in excess of 10,000 get reported whether the funds are coming in or going out. Multiple transactions equaling 10,000 or more are viewed as one transaction. Purposefully trying to skirt the limits is called "structuring" and can be reported to the Feds as suspicious activity.

 

[GrnMtnMan]

The bank is required to report $10K transactions that involve cash. Such as coming into the bank with $10k in actual cold hard cash and wanted to deposit it. Or withdrawing $10k in actual physical cash and walking out with it. They are looking for drug money transactions.

You are actually talking about several different issues:

1. Check Holding -- this will depend on the institution and the relationship the depositor has with the institution

2. Reporting to the IRS-- Cash amounts in excess of 10,000 get reported whether the funds are coming in or going out. Multiple transactions equaling 10,000 or more are viewed as one transaction. Purposefully trying to skirt the limits is called "structuring" and can be reported to the Feds as suspicious activity.

+1

This is correct. And to further clarify: there is no tax withholding on non-cash deposits of any amount. Or cash deposits for that matter.

And its not so much about reporting gifts, but about the taxes due: gift givers can give up to $14,000 per year to as many individuals as they like. Any amount over $14,000 is taxable, and the *giver* of the gift has to pay that tax.

 

[marius97]

And its not so much about reporting gifts, but about the taxes due: gift givers can give up to $14,000 per year to as many individuals as they like. Any amount over $14,000 is taxable, and the *giver* of the gift has to pay that tax.

To add...you can give more if there are spouses involved too. DW and I could each give the $14,000 to someone. Then we could each give another $14,000 to their spouse. Thus, you could give $56,000 to one couple without the tax coming into play.

 

[marius97]

2. Reporting to the IRS-- Cash amounts in excess of 10,000 get reported whether the funds are coming in or going out. Multiple transactions equaling 10,000 or more are viewed as one transaction. Purposefully trying to skirt the limits is called "structuring" and can be reported to the Feds as suspicious activity.

You don't want to mess around with it not being reported. I know someone that investigates those transactions for the feds...oh the stories that he can't tell us. Even if it does get reported to the feds as a transaction, the worst that would happen is some inconvenience and delay. If you can show proof of the inheritance, there would be a clear paper trail to show the legitimacy of the money.

 

[angierae]

To add...you can give more if there are spouses involved too. DW and I could each give the $14,000 to someone. Then we could each give another $14,000 to their spouse. Thus, you could give $56,000 to one couple without the tax coming into play.

Yup. My aunt's neighbor's parents won the lottery, and every January both he and his spouse each get the max from each of their parents, so right now they're getting $56k tax free every January.

 

[dreamin_disney]

Thanks everyone. i'll pass on the information.

The check is from an attoney who did the probate so she has proof. I guess she was wondering because one person owes back spousel or child support she just said support. so she wanted to make sure she could give a gift and if the bank holds it, reports it and if IRS can take it. I told her I didn't know if they could do that but sounds like cashiers check might be best way so the person can cash it and get their money but IRS will probably get them at tax time

Me and the other coworker just told her not to be withdrawing large sums of cash causes that dangerous.

@ Angierae- your Aunts neighbors are lucky. I wish I could get gifted $56K tax free a year-lol!

 

[davedmaine]

She should probably contact an estate-planning attorney on her own.. Relying on a friend who asks people on a Disney vacation forum may not be the best approach .. just sayin

 

[dreamin_disney]

She should probably contact an estate-planning attorney on her own.. Relying on a friend who asks people on a Disney vacation forum may not be the best approach .. just sayin

She's planning to make an appointment with a cpa. She was waiting on her tax person but barely heard back and tax person told her she doesn't handle estate stuff and refered her to a cpa. Shes gonna make an appointment.

 

[tinkerone]

banker here but a Canadian banker. most of it is very similar.

first, they should not do a cash transaction for pretty much the reasons listed above. while deposits that are $10,000 or above have to be reported smaller amounts can be reported as well. if there is any suspicions a banker is to report it. say you go to the bank today and deposit $5000 in cash then do the same tomorrow and the next day take in the remaining $4000, that should be reported as it looks as if the client is deliberatly trying to alter one transaction. cash, for that amount, is just never a good idea.

second, while a cashers cheque (money order, official cheque) is the best idea a bank has the right to put a hold on that as well. the number of fraudulent money orders is unbelievable. if this is a unusual transaction not seen in the account you can be sure they will probably put a hold on it for 5-7 days.

third, if there is an issue of back child support and the irs is involved the client can be s.o.l. no matter what they do. we have had accounts that have alerts on them and any large amounts are to be debited to the account and sent to the branch of government that is requesting us to monitor the account. they can deposit it but they are not getting it back.

if I were that person I would talk with my bank and find out what they recommend. the bank can let them know what is the best option and if there will be any issues to that sort of deposit. better to check early and not get a surprise .

hope all goes well for your friend.

 

[Swimalie]

You don't want to mess around with it not being reported. I know someone that investigates those transactions for the feds...oh the stories that he can't tell us. Even if it does get reported to the feds as a transaction, the worst that would happen is some inconvenience and delay. If you can show proof of the inheritance, there would be a clear paper trail to show the legitimacy of the money.

Anything over $10,000 will be reported to FinCEN - Department of the Treasury. It's normal but don't worry. Unless there are transactions like this over and over, they won't have a problem. My husband is one of those feds that investigates.

 

[3boymthr]

She needs to keep it under $14,000. If she give them more then she will be subject to the gift tax and under $10,000 if she doesn't want to be subject to inspection by the bank.

 

[Gracie09]

anyone else feel squeeky that she is knowingly trying to hide the money so the person she is giving it to doesn't have to pay court ordered support (whether child or spousal). That is just wrong imo. I'm sure the person who gets the money isn't going to turn around and give it to the ex-spouse or the child's custodial parent to pay his or her obligations to them.

 

[GOOFY D]

She's planning to make an appointment with a cpa. She was waiting on her tax person but barely heard back and tax person told her she doesn't handle estate stuff and refered her to a cpa. Shes gonna make an appointment.

She may need to get her a new tax person. Any tax accountant should know the gift tax rules at a minimum.

 

[manning]

She needs to keep it under $14,000. If she give them more then she will be subject to the gift tax and under $10,000 if she doesn't want to be subject to inspection by the bank.

That's per person. You can give $14,000 to any number of people.

 

[RitaE]

She can give up to $14k per person per year without doing anything.

If her gift is larger than $14k, she will need to file a form with the IRS to apply it against her lifetime exclusion amount. Unless her estate is worth over $5+ million, she still won't pay gift or estate taxes so it is really just a paperwork thing. Our government loves it's paperwork. And if her estate is worth over $5+ million, she should already have and Estate and Tax Planning Expert hired and not need the DIS budget board for advice.

As for the Bank tracking amounts greater than $10k, that is also just a form to fill out. It isn't that big of a deal.

And yes, it also sounds to me like the person is attempting to avoid some sort of Support Garnishment on an account.

 

[dreamin_disney]

anyone else feel squeeky that she is knowingly trying to hide the money so the person she is giving it to doesn't have to pay court ordered support (whether child or spousal). That is just wrong imo. I'm sure the person who gets the money isn't going to turn around and give it to the ex-spouse or the child's custodial parent to pay his or her obligations to them.

She can give up to $14k per person per year without doing anything.

If her gift is larger than $14k, she will need to file a form with the IRS to apply it against her lifetime exclusion amount. Unless her estate is worth over $5+ million, she still won't pay gift or estate taxes so it is really just a paperwork thing. Our government loves it's paperwork. And if her estate is worth over $5+ million, she should already have and Estate and Tax Planning Expert hired and not need the DIS budget board for advice.

As for the Bank tracking amounts greater than $10k, that is also just a form to fill out. It isn't that big of a deal.

And yes, it also sounds to me like the person is attempting to avoid some sort of Support Garnishment on an account.

She's reporting it to the IRS, She has to. She just didn't know the best way to give it , because she did want them to get some money and it not all be taken away. I guess the kids are older now in their 20's so don't know how IRS deals with that if they did take the money if kids would get it or not. The mom remarried years ago and the husband has little ones in the home so that's why she would like him to get some money. if she gives the cashier check he'll get the money but when its reported then IRS will know. I told her he should have taken care of his responsibilities and she agrees. She said she not getting into trouble so shes reporting it. I told her just give it to me-lol!