How would I prevent an IRS gift tax from this mutual fund transaction?
Q.I've loan $100K without interest over the years to my son for his college education and living expenses. Son now has $100K in mutual fund which he will sign over to me as repayment of the loan. So how would I prevent an IRS gift tax from this mutual fund transaction? I have my canceled checks for the education and living expenses for my son.
A.Most likely it's a gift from him to you. The canceled checks are not sufficient as they don't prove the intent of a loan being made nor any expectations to be repaid. Having a loan document that was signed back when the loans were made would be helpful. Maybe he can just sign over $12,000 a year, or that times 2 if you're married.
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