Is this mound or excise fraud?
my parents plan to give me money towards the downpayment of my first home. my lender is recitation me that in the paperwork this money should be characterized as a grant and my parents need to sign a "contribution letter". My lender is saying to do it this instrument even though there could be, his words, "a side deal" where on earth my wife and I pay my parents interest and will want to eventually discharge it back. I am almost persuaded this is some sort of tax or edge fraud. can someone, preferably an attorney or lender, point me in the right direction of what canon or tax code part what i've described violates?thank you surrounded by advance
Answers: It isn't toll fraud, but might come close to bank fraud if it's really a loan but you claim it's a offering. If they are really giving you the money, then there's no problem.
The motivation that if it's really a loan and you claim it's a gift, it's a problem is that when decide whether to make the loan to you, the dune looks among other things at your other debt. If it's really a loan you have to foot back, your debt would look lower than it really is and they might qualify you for a loan you can't really afford.
Most feasible the chance of IRS cracking your parents down on not reporting contribution tax is slim to none. Of course, I'm not dictum you shouldn't follow the law. Rather than a payment, you can draft up a letter that you are loaning the money from your parents for downpayment. Of course, you entail to have the intent of paying your parents rear legs and since I'm sure you're a good son, you will thieve care of your parents so that's a course "pay" back but you stipulation to pay spinal column with money, not freshly care. Small amount is upright, as long it's no lower than the prime rate. This usually will do the trick on closing the loophole.
The formal method is that your parents will have to report the money given to you smaller amount the $24,000 (you and your wife) on their tax return. A combined parent return can exclude up to $2million endowment from tax. If your parents give you 200,000 for downpayment, less 24K, later they will report $176K gift on their return. The combine report still hold a remaining of $1.824 million that can be excluded as gift. Keep contained by mind that if they have a trust, the trust will simply be able to donate out at a max of $1.824 million tax free, the rest will be tax.
BTW, this is a common practice from the mound. Something that IRS is requiring them to do as well. It's abundantly easier to get business to comply than individuals.
For further information check out the links below:
http://www.irs.gov/newsroom/article/0,,i...
http://www.irs.gov/pub/irs-pdf/p950.pdf
They do it this style - so they know its a gift. afterwards they do not have to lug it into consideration that you have to foot this back - SO, that manner you have adequate money to pay THEM. so, yes, you want to do it- and no, its not fraud.
you don't want a "note" that say you are borrowing the money- because thats not what the bank wishes - for you to borrow money on your down payment.
Can i file taxes when i only made under $2.00 in state and local. I also got my school returns and have 2 kids
Answers: Is that state withholding, state income, WHAT?
Your question is unclear. . . .
If you are not a dependent, if you make more than $8500 you must file, less than that, you may file.
IF your income or state withholding is only $2, you are not self-supporting, and who ever is supporting you can file, claiming you and the children as dependents.
Not a lot of point in filing. With 2 kids you probably qualify for EIC, but it would only be $10 if you made under $50. If you are going to pay someone to do your return, you'd pay more than that. I'm a little confused by your question though - is the $2 your income, or the amount of tax that was withheld?
Can I track my W2s? Or how can i capture another copy of them?
Dont have a unbreakable address, I think my W2s may hold been lost surrounded by the shuffle. How can i get duiplicates?Answers: You can ask your employer for a duplicate.