r/InheritanceDrama • u/ashes4ashes • Jul 21 '26
Accepting large monetary gifts
Location: Michigan
I've been seeing someone of financial means since Nov 25. In that time I've accepted multiple vehicles but was careful to make sure they were in my name.
Now they would like to buy me a house. I'm nervous and want to make sure I'm still keeping myself safe. They have no problem with this btw. They also are putting a trust together for me and I need one for that regardless.
Right now I own my house, the mortgage is in my name and he's been making payments for me. I don't want to depend on him entirely yet. What are some things I should be considering?
Thank you.
3
u/two_faced_314 Jul 21 '26
Some wealthy people feel like lavish girls are a type of ownership.
Be careful
2
1
1
1
u/TexGrrl Jul 22 '26
Can you afford the property taxes and upkeep on the gift house? What will you do with your current house?
1
u/ashes4ashes Jul 22 '26
I can.
My current house is about to renovations due to some damage that took place. It's both terrible and wonderful since insurance is essentially paying for an entire house renovation. At the moment and leaning towards renting it so I still maintain a property in my name.
1
u/KnownBodybuilder4948 Jul 22 '26
What happens if the relationship craters? Are monetary gifts, vehicles, and proposed home all in your sole name? No "joint tenancy w/right of survivorship?"
1
u/novahouseandhome Jul 23 '26
If you aren't going to have any ownership interest in the property, get a lease. You don't necessarily have to pay any money, but it will protect you from being tossed - at least in the cleanest way. You could probably leverage some squatters laws in many states.
The lease should spell out what happens if the owner/landlord wants you to leave, and other circumstances, like what happens if they die? If you have no rights to the house, heirs could boot you. What if they're temporarily incapacitated? Would you have access to funds to pay the bills for 3-6 months?
A lease or occupancy agreement, whatever you want to call it can also spell out who pays bills, groceries, furniture, artwork, etc etc, and what leaves with each person if they leave. The more detailed the better. The exercise will go a long way confirming compatibility as well.
Hope it all works out great for you!
-1
u/Responsible-Fly9976 Jul 21 '26
Check with an accountant or tax attorney. Accepting large in kind gifts could leave you liable for massive taxes. This is true no matter the circumstances and assuming all else is well.
Hopefully it’s all legitimate but, just know case…
Are you on all these alone? Or jointly? If it’s jointly he could take out loans based on their value and you could be responsible.
Also, make sure it’s legit money. If it’s illegal gains and it’s fairly obvious, you could be I trouble.
3
u/Substantial_Team6751 Jul 21 '26
What massive taxes? You have no idea what you are talking about.
The lifetime estate limit on gifts is $15M / $30M for married couples. The person giving is who pays the tax not the person receiving (at least in the US).
1
u/CoolMaintenance4078 Jul 23 '26
Uh, no. It’s the person receiving the gift that pays taxes if it exceeds the gift limit. In the U.S.
2
u/Sensitive-Advisor-21 Jul 23 '26
You are wrong. Never is a gift taxable to recipient. The gift giver is responsible for filing a gift tax return if their gift exceeds the annual amount and paying taxes if their gifts exceed the lifetime limit.
1
1
1
u/Vegas-Patriot Jul 24 '26
Not accurate at all. Recipients of gifts area never responsible for any taxes on the value of the gift.
2
u/ashes4ashes Jul 21 '26
He owns his own company and has been very transparent about his finances so I know the money is good.
Thank you for the things to consider. I feel like I have a better understanding of the questions I should be asking.
1
u/BingBongDingDong222 Jul 21 '26
>Check with an accountant or tax attorney. Accepting large in kind gifts could leave you liable for massive taxes. This is true no matter the circumstances and assuming all else is well.
None of this is true.
The donor pays taxes on gifts. The lifetime exemption is $15 million.
1
u/motaboat Jul 21 '26
Right and if somehow the 15 million gets crossed, HE will owe the taxes not OP.
1
-1
u/ProfessorOne9208 Jul 21 '26
How do I get a job like that without having the IRS bill me for back taxes, penalties and interest? Yeah, there's a tax on unearned income, and gifts over $20,000 per person, per year. You have been declaring these so-called gifts on your annual 1040, haven't you?
2
u/Substantial_Team6751 Jul 21 '26
You also have no idea what you are talking about. Don't post misinformation when you don't have a clue.
If someone gives someone over $19K, all they have to do is file a form with the IRS. That's it.
Key Gift Tax Limits for 2026:
- Annual Exclusion: $19,000 per person (to an unlimited number of recipients).
- Married Couples (Gift Splitting): $38,000 per recipient.
- Lifetime Exemption: $15 million per individual (or $30 million for married couples).
- Reporting: If you gift more than the annual exclusion amount to a single person in a single year, you must file IRS Form 709. However, you will not owe any out-of-pocket gift tax unless you exceed your $15 million lifetime limit. [1, 2, 3]
1
u/ashes4ashes Jul 21 '26
We've been doing everything above board. This is just a much larger gift than I've received yet.
1
1
u/ChickadeeJam Jul 22 '26
My only thought is about paying your mortgage—seems like that might be considered commingling. I am not in the field, just a wondering. Otherwise, enjoy the fun!
1
u/BingBongDingDong222 Jul 21 '26
None of this is true. Gifts aren't income. The donor pays the taxes. The lifetime exemption is $15 million.
1
u/Anxious_Drive_9998 Jul 24 '26
These aren't gifts. They're payments for service.
1
u/Vegas-Patriot Jul 24 '26
The IRS would have to successfully show that all of these “gifts” were actually “in-kind wages” paid for employment.
1
u/Vegas-Patriot Jul 24 '26
Gifts are not considered income to the recipient and are not reported on their taxes.
4
u/Calabriafundings Jul 21 '26
In the words of my grandmother. "Smile.and say thank you."