<p>SOS-
You seem to be overreacting. No one is criticizing. You are welcome to your beliefs. But some discussions seem more appropriate to interject religious beliefs or “faith”, than others. This is one of the “others”. Just because some feel that its not really a part of this discussion does not mean they have “baggage”. Thats pretty critical and without merit… Bringing up Suze Orman’s sexual orientation was what I found unnecessary. Give posters here some credit, they would have understood your comparison to Dave Ramsey without the need to spell it out for them. Thats lovely that some dying atheist accepted prayers. Its unclear hos that is related to the discussion of retirement planning.</p>
<p>People make decisions based on all sorts of things. Feng Shui, Astrology, etc. All are fine, if it helps them achieve their personal goals. </p>
<p>So back to retirement planning, and a slightly OT question. DH and I were discussing our upcoming engagement party and their wedding, and the discussion of a wedding gift ensued. I assumed we’d be giving them a significant $ gift, to go towards their honeymoon or the eventual “buy a small house in a ridiculously expensive real estate market” fund. Apparently the dollar amount I had in my head was higher than what my DH had considered. And whatever we give to S#1 we will give to S#2 eventually. Fortunately the gift amount probably won’t affect our retirement plans, but the dollar amount was different. Any suggestions/thoughts/opinions from experience?</p>
<p>Oh and by the way… one solution to lead to a rapid “clean out the closets” is to invite 9 people (including the future inlaws , her other adult child and their family) to stay at your house when you throw an engagement party. THAT will get some serious housecleaning to ensue.</p>
<p>jym, one of my friends just gave her son the difference between what they spent on his wedding and what they spent on his sister’s wedding. She was surprised when I mentioned the IRS and gift limits. An individual can give another individual up to $14,000 per year without needing to keep track and file forms for eventual estate tax reasons. Of course she could give son that amount, her DH could do likewise, and then each of them could give the new DIL the same amount, which more than covered the gift in question. But that’s not how they did it.
I know the current estate tax limit is over 5 million, but I’m not counting on that remaining the law. When and if we are ever in the position to give kids large cash gifts, we will keep checks under the limit and one from me, one from dragondad. I don’t want them sorting our tax issues after we are gone because of technicalities. </p>
<p>Congratulation on the upcoming wedding! Good luck with the closets! We have a new engagement in our family but I haven’t fully processed it yet…</p>
<p>Not to put a damper on, but if I give such gifts to my kids I will suggest they put them in a separate bank account under their own name and track how they are spent, preferably without merging into other accounts. Okay to do things like pay down the mortgage, etc., just keep it as a separate transactions. Pays off if they ever divorce (paid off in mine…).</p>
<p>OOh, totally forgot about the gift tax, dragonmom. Thanks for the reminder. I suppose we could gift half to him and half to her, but then that defeats the purpose of intparent’s excellent point. In our case, that ship has sailed, since DS used a family stone in the ring. There just didn’t seem to be any delicate way of saying “dibs on the ring if you guys don’t make it”. </p>
<p>Dragonmom,
Congrats!! It sinks in, but the word fiancee takes some getting used to. The wedding is next year, and we have the rehearsal dinner, etc budgeted, so its not going to affect retirement. I still can’t figure out how much is “enough”. I watched my dad struggle with cashflow problems (or should I say I experienced it, as I handled his $ for 7 years). I dont ever want to be in that situation or have to worry about paying bills or what stock I have to sell to pay them. </p>
<p>As an aside, don’t have any girls so won’t be able to compare the event costs. Though this engagement party has taken on a life of its own and will be $$.</p>
<p>We haven’t faced the wedding gift thing…but here is what friends did. They gave the wedding couple an amount towards the wedding. If the couple came in under budget, any leftover money was theirs. I like that idea. </p>
<p>After marriage, these parents were very generous in terms of helping set up the household…furniture purchases. Etc. so it’s not like the couple never got gifts from them.</p>
<p>Back to the retirement thing. Regarding the house…I just don’t see us moving. We have lived in our house for almost 20 years. We are doing the repairs and replacements NOW. Last year was the roof and kitchen appliances. This year will be refinishing the wood floors and painting the house interior. Next year will be a new driveway, and new upstairs carpets. If we stay in the house, fine. If we move, these things will be done. Our mortgage is paid off, so we are just using the mortgage payment amount to fund the updates.</p>
<p>That could work, thumper, except we are paying for the rehearsal dinner/flowers/wine (not sure about the rest of the bar). The brides family is footing most of the bill. So we feel we should give a gift.</p>
<p>We are doing what you are doing with the house. Updates in stages. The kitchen, bathrooms, hardwoods, family room and terrace level (aka basement) are done. The kids rooms still almost look the way they did when they lived there. Those will be next. The living/dining room area is also dated. Will probably redo window treatments, recover chairs, etc. DH doesn’t understand that we (I) can spend so much a month – well, all these updates are not cheap. He’s been talking about replacing my 9 yr old car too. And we are travelling more. I don’t want to now have to really skimp. Am not one to have to live in the lap of luxury, but dont want to stay in the Motel 6 either (no offense if anyone stays there).</p>
Does this apply to the tuitions and fees that parents help pay for their child for college? I believe many (but not all) parents paid more than $14,000 per year in their child’s college years. But it is odd that this should be reported to IRS as gifts. If it is not considered as a gift, is it because the child does not receive it (it goes to his bursar account of the college instead of his bank account) or he/she is not old enough?</p>
<p>Many parents indeed need to report the college expenses in tax return because of the 1099-T qualified education expenses but it is mostly for Hope (or American Opportunity now?) or Lifetime education credits.</p>
<p>No. Paying college tuition to a college is NOT,considered a gift to your child. You aren’t giving it to the CHILD. You are giving it to the college.</p>
<p>mcat2,
I think the gift to a family member has to be paid to the family member. Then the family member (aka the child) can use it to pay for tuition. Not sure if it would have to be reported as unearned income for purposed of FAFSA or CSS? Dr. Google, you in particular seem very versed in this. Do you know?Or anyone?</p>
<p>A payment made to an educational institution by anyone (hear that grandparents) to pay tuition does not count as a gift to the student for gift tax purposes.</p>
<p>If the payment was to be made by grandparents I believe it is reported as untaxed income to the student on FAFSA. There are no tax issues For payments made by a student’s parents.</p>
A parent paying tuition and fees for their child does not create any sort of taxable event for anyone, and it is not considered a gift by the IRS.</p>
<p>It doesn’t create any sort of unearned income for FAFSA or CSS either.</p>
<p>If the money comes from some other relative, it is not a gift if it is paid directly to the school IIRC, although that does have to be reported on FAFSA or CSS. The prevailing logic in that case is to give it to the parents, not the kid, because income for the kid is assessed at a much higher rate.</p>
<p>jym, when we were on vacation back when S2 was a preschooler, we heard his little voice pipe up in the back of the car: “That hotel has a six on it. We can stay there.” And we generally did so. Just one of the ways we could afford to pay for college…though we have upgraded to Red Roof and La Quinta these days (pet friendly).</p>
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