Follow
Share

My father in NH is most likely going to pass this year and I have come to realize he hasn't paid taxes in years. He has also been sending his children large checks. Gift penalties kick in at $14k. Who gets penalized? will the government come after my siblings? He has no will so the money in his account will be taken... I am sure a check is coming to me and I think I will not cash it= I dont want to get in trouble!

This question has been closed for answers. Ask a New Question.
It is the person who gives the gifts that has to pay taxes if the gift is above a certain amount. Your siblings should be ok. Is dad still ok mentally? If so have him make out a will now. It is easy to do. You can help him with it and it may help you avoid probate. Who is his POA ( financial) if that is you I would take care of as much as I could before he passes. As far as taxes go again if you are POA see an enrolled agent, many great ones at H &R Block who can help you with passes taxes, as was mentioned he may not owe anything if his medical was enough to offset income. Hope the best for you.
Helpful Answer (1)
Report

HUD exclusions from annual income include : Temporary, non-recurring or sporadic income(including gifts)
ok good.
they are checks for $4,000- but for his four children, and maybe twice a year(?) But the gift tax thing is per person so that doesnt come close.
I looked up intestacy laws too, thank you.
ok i feel better-
Helpful Answer (0)
Report

It is extremely rare that they will come after you for gift taxes unless the amount is considerable...but it is a possibility (albeit rare). As long as you aren't dealing with amounts much larger than 14k per year per person, you should be ok. Also, if the giver pays education expenses, or medical bills of the recipient, no tax needs to be paid on either side.

Angel
Helpful Answer (0)
Report

Mica, unless I'm missing something, your father will die intestate (w/o a will) since he has none. In that situation, disposition of his assets will be according to state law, which typically establishes a heirarchy for disposition among heirs (after creditors are paid off). Your profile doesn't indicate what state you're in, so I can't check, but you should google "[your state] intestacy laws."

However, since his income was directed toward nursing home costs, there's a possibility that his medical costs might offset any tax liability.

This is not something I would leave to chance and forego a gift check after his death. See a CPA now, and if there's liability, it's worth a consult with a tax law attorney; I believe the ones who can practice before the IRS are called enrolled agents.
Helpful Answer (1)
Report

ya, thats what I meant, there wont be anything left after all those taxes get paid lol.
My siblings being HUD etc I was worried they might be found out they have accepted money from him- I truly hope not, they need it badly.
Helpful Answer (0)
Report

His money won't go to the state. It will go to the heirs after all the debts are paid off. If there is no will, the estate will go into probate when all the leins and debts are settled (including all the IRS debts from the unpaid taxes and the gifts).

You and your siblings will not be held responsible for those taxes.

Angel
Helpful Answer (1)
Report

no he isnt on medicaid. His NH is covered 100% with his vet. money. His income is the vet money, SS and pensions. Ok, so any savings he has will go to the state upon his passing.
I am afraid of the gov looking into who he gifted to and penalizing them..- my sibling is low income - will they find out she got unreported gifts from him?
yes, it is a messy situation which is why I am afraid of cashing future ck coming
Helpful Answer (0)
Report

Is your father on Medicaid? Or is he paying the nursing home out of his own pocket?

If he is on Medicaid, they will come looking for the gifted money.

If he is paying out of pocket then the only issue you have is the over 14k gift tax (actually I believe in my state its 13k so make sure to check your state for the specific amount). The person responsible for paying the gift tax is the gifter (your dad).

Angel
Helpful Answer (1)
Report

This question has been closed for answers. Ask a New Question.