More on Gift Tax

Andy comments:
I am aware that the law requires a person to file some sort of tax disclosure when one gives a gift exceeding a certain amount.
My question is " How would the government, or anyone, know if
a person just gives a gift to someone and doesn't tell anyone about it ?"
My suspicion is that it is done a lot, and reported rarely, and that nothing bad ever comes of ignoring the requirement.
Andy
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Reporting requirement only on amounts exceeding a certain level.
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AndyS wrote:

Person receiving gift might have to show that it was a gift, and not taxable income. To do this, they will probably have to name the donor. IRS can look at bank records for audit purposes, too. Gifts large enough to trigger the reporting requirement are probably not often made without some kind of bank record.
-Mark Bole
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Andy comments: I understand your point. However, if one decided to buy 100K in Canadian Maple Leaf gold coins, and then just give them to someone who would know that the gift needed to be on the downlow, and , if cashed, done one or two coins at a time...... I can't see how the gov would get involved. There would be a record of the buyer receiving the coins, but they then magically disappeared. Unless someone tells the government where to look, it looks to me like nothing bad will happen.
Andy in Eureka, Texas
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It's like many other situations - if you don't tell them and they don't audit you, they may never find out.
But the law requires that you tell them. If you don't, and they somehow find out (either by auditing you or someone else involved in the transaction) and they believe you did it intentionally, you could go to jail.
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Stu
http://downtoearthlawyer.com
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Here's another, unrelated gift tax question.
Suppose TP pays for a large amount of veterinary work for a cat. If the cat "belongs" to someone else, is this a gift to that person? Or is TP merely acting on their own desires to help out a cat, regardless of it's ownership, such that this is just a purchase of veterinary services by TP, not a gift?
Steve
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To whom was the money handed?
Seth
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Let's say the vet.
This is hypothetical.
Steve
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I strongly suspect there are ways to structure it that don't constitute a gift to the cat's owner. Paying prior to treatment ought to help; paying off someone else's debt is more likely to be considered a gift.
Seth
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There are clear rules which allow me to pay for your higher education or medical expenses, unlimited, so long as I pay to the institution directly. I don't see how paying your vet is any different from paying your landscaper. treated as a gift to you, and subject to reporting if over $13000.
Joe
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Not relevant.

Why are you saying "your vet"? Why not just, "a vet"?
What about vets who donate their time? Gift?
(Or tax pros who donate their time, for that matter...)
S.
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I think there was a misinterpretation in what was said here.
And you are both in agreement that only payments directly to a doctor/dentist but not a vet, and payments directly to a qualified educational institution, escape gift tax.
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ArtKamlet at a o l dot c o m Columbus OH K2PZH

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I'm sorry, but I disagree. Payments _which are gifts but that_ are made directly to a doctor/dentist/school escape gift tax. Payments to a vet will not incur gift tax unless they are gifts. The question is, under what circumstances are such payments a gift.
If the vet is treating a stray cat, it surely isn't a gift, for example.
Steve
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On 6/22/10 6:42 PM, Steve Pope wrote:

Relevant in that it describes the scenarios where such gifts are permitted. (as Art added - Dentist)

Because that's how it was set up. It's someone's dog. I have nothing against taking care of one's pet, but the Tax code makes no mention of me being able to pay for care for your dog, not above $13,000, anyway. It would seem that the question itself is contrived if only for the fact that animal surgery is much less expensive than for humans. I can't find any going much above $6K. I suppose that's neither here nor there, payment doesn't avoid gift tax paperwork (above the $13K).
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Whether you see a difference or not, it exists.
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On 6/22/10 10:57 PM, Bill Brown wrote:

Bill - pls cite where the IRS allows such a payment to avoid gift tax concerns. (In fact - I'll withdraw the bad analogy - If my neighbor's tree has a disease that if untreated will spread to my property, I'm sure I can get away with paying for it, as not doing so would injure me. But again, that's not the Vet issue)
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I am not going to look up the code cite which specifies that payments on behalf of another individual made to a health care provider or an educational institution are not gifts for federal gift tax purposes. The section exists and its existance is well known to tax professionals.
Since you are the one taking the contrary position, you provide a citation that allows payments to a veternarian to treat another individual's pet to be anything other than a taxable gift to that other individual.
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Bill -- please go back and re-read what is written above. You have completely reversed what Joe actually said, and are carelessly persisting to do so in multiple posts.
He states that it *is* a taxable gift, just like the payment to the landscaper.
-Mark Bole
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If it's a gift, then it is taxable.
The question is when is it a gift?
Person A: "I'm gonna shoot my dog, he has a broke leg" Person B: "Let me take him to the vet and get it set" Person A: "None of my business, but do what you want"
Gift?
It depends on facts and circumstances. We can agree that if it's a gift, then it's taxable, and not excluded like medical/education expenses might be. But this does not mean it's always a gift. It depends. (In my opinion.)
Steve
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Steve Pope wrote:

Agreed. Especially when someone somehow sneaks their pet into a really fancy Washington DC dinner party without a ticket... ;-)
-Mark Bole
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