Is loaning interest-free money to relatives illegal?

Quote from MadRhetoric : But this isn't true. YOU aren't taxed for all those events. When you give away money or leave it as an inheritance, the people receiving it are taxed. And I don't know what you mean by you're taxed when you save it. There are tons of tax programs that encourage saving (retirement plans etc.). And you're not taxed whenever you spend it, only when you spend it on certain items (groceries aren't taxed for example). So I think you're just upset over the whole concept of taxation in general....

I'll come back to everything else but right now I just want to talk about your comment "groceries aren't taxed". Uhhhh, I don't know where YOU live but here in MS we pay 7% tax on everything, groceries and meds included. My sister and my son live in AL and both pay 9.5% on groceries.

Quote from MsGal : I'll come back to everything else but right now I just want to talk about your comment "groceries aren't taxed". Uhhhh, I don't know where YOU live but here in MS we pay 7% tax on everything, groceries and meds included. My sister and my son live in AL and both pay 9.5% on groceries.

http://en.wikipedia.org/wiki/Sale...able_items

The majority of states don't tax groceries.

Quote from MsGal : I'll come back to everything else but right now I just want to talk about your comment "groceries aren't taxed". Uhhhh, I don't know where YOU live but here in MS we pay 7% tax on everything, groceries and meds included. My sister and my son live in AL and both pay 9.5% on groceries.

And you pay 1% less in state income tax than them. Taxes are just hidden elsewhere so. "TAX FREE GROCERIES1!1!" = higher taxes elsewhere. No state income tax usually means higher property taxes. Also the taxes collected reflect the supply available.

The OP is about federal taxes. Quit confusing city, county, and state taxes with federal because those taxes actually provide your day to day services and are useful.

Quote from MadRhetoric : http://en.wikipedia.org/wiki/Sale...able_items The majority of states don't tax groceries.

Then NONE should be allowed to charge it.

Quote from sd444 : The OP is about federal taxes. Quit confusing city, county, and state taxes with federal because those taxes actually provide your day to day services and are useful.

I live in the city limits, less than one mile from the county line. If I lived in the county, my property taxes, car tags, school taxes and all other taxes would be HALF of what I pay now. People in the county utilize the same services that we in the city do but pay half as much.

But I digress.

Yes, the OP is about being taxed on money you "gift". I pay taxes when I earn it. I pay taxes when I spend it. I pay taxes when I save/invest it and my estate is taxed when I die.

It's just wrong.

Quote from MsGal : Yes, the OP is about being taxed on money you "gift". I pay taxes when I earn it. I pay taxes when I spend it. I pay taxes when I save/invest it and my estate is taxed when I die. It's just wrong.

Wahhhhhh, wahhhhhhhh, cry some more. Dear lord people, enough crying about taxes, your tax burden today is the lowest it has been in modern American history. Add on top of that the lowest interest rates ever, and you have tons more spending power than your grandparents did.

I guess you are totally ignorant about why different means of taxing exist, and thus why the government taxes 'everything.'

If I only tax income, then people living off of trust funds in mansions would pay no taxes, nor would retirees who's SS or pension may be peanuts. Thus I have to charge high income taxes, which punishes workers.

If I only tax purchases, yet again, I have to charge high taxes on purchases which disproportionally affect the poor or those with a limited income like retirees. If decide not to tax the necessities (food/fuel/utilities) then I reallllly have to tax like crazy on technology, luxuries, housewares, etc. You think Sony/Samsung/Apple are going to like that?

If I only tax properties, I have to charge ridiculous property taxes to make up for lost income/purchase taxes. Guess what, fixed income retirees get screwed (see Florida) and so do property investors/managers.

This is why a balanced approach is the best. You wanna see stupid? Look at what that dumbass Florida governor has done. He wants to eliminate corporate taxes to bring in business, but FL has no income taxes. Thus all those new workers wont be contributing to the tax income via working. Meaning they will rely solely on property and sales taxes. Guess what, people will live across the border or buy things across the border to get around that. Except those who live too far away, in which case retirees will flee the state.

Balanced is best, so be thankful that the government taxes 'everything' to spread the cost around, and also be thankful the rates at which they tax are ridiculously low.

Quote from travathian : .... your tax burden today is the lowest it has been in modern American history.

Where the fark do YOU live????

Quote from MsGal : Then NONE should be allowed to charge it.

100% true and chances are you are not paying taxes on groceries when you are shopping and you don't even realize it.

Go buy a steak from publix. It will scan for the amount on the label and you will only pay for the amount on the label.
Try it with a can of corn. Same result.

I worked at a grocery store in highschool. I've manually entered in barcodes into the system on new products that arrived and there was simple check box for if the item had sales tax.

You are charged tax on processed items like ready to eat pies, already made sandwiches from the deli, hot items prepared on site.

If you go to a grocery store and pay tax on a steak or a can of corn you should let a manager know that a barcode is wrong in the system.


For more examples: http://www.tax.ny.gov/pubs_and_bu...stores.htm

Quote from MsGal : Then NONE should be allowed to charge it. I live in the city limits, less than one mile from the county line. If I lived in the county, my property taxes, car tags, school taxes and all other taxes would be HALF of what I pay now. People in the county utilize the same services that we in the city do but pay half as much. But I digress. Yes, the OP is about being taxed on money you "gift". I pay taxes when I earn it. I pay taxes when I spend it. I pay taxes when I save/invest it and my estate is taxed when I die. It's just wrong.

I think you seem to be exaggerating to prove your point. Notice the city roads paved better? More firehouses, schools, internet service, bus service, hospitals, etc, etc... There should be, and most likely is, a huge drop off in services right at the city limits. If your city is subsidizing the county, then blame yourself for voting for the people running your town.

You can easily solve your tax problems by moving or go buy a boat and live in international waters. But then I think you would just complain about the lack of services.

Taxes pay for services.

Quote from 0mega : 100% true and chances are you are not paying taxes on groceries when you are shopping and you don't even realize it. You are charged tax on processed items like ready to eat pies, already made sandwiches from the deli, hot items prepared on site.

*sigh*

No. We pay 7% on ALL foods, doesn't matter the type. When I lived in FL we paid NO taxes on food. None! Now they pay tax on "junk" food and soda.

Quote from sd444 : I think you seem to be exaggerating to prove your point. Notice the city roads paved better? More firehouses, schools, internet service, bus service, hospitals, etc, etc... There should be, and most likely is, a huge drop off in services right at the city limits.

No.

Quote from MsGal : *sigh* No. We pay 7% on ALL foods, doesn't matter the type. When I lived in FL we paid NO taxes on food. None! Now they pay tax on "junk" food and soda. No.

FL is taxed across the board on food. That isn't some "recent thing."

Quote : If your city is subsidizing the county, then blame yourself for voting for the people running your town.

Stupid people elect stupid people who vote stupidly. Look in the mirror or move if you don't like it.


Your son goes to college:
http://slickdeals.net/forums/show...stcount=25

Are you aware that 25-50% of in-state tuition is subsided by the taxes you don't want to pay anymore? Goes to school out of state? Someone else is paying that. People who live near you temporarily or move for a new job subsidize that same tuition. Why should other people pay for your son's education?

Quote from StarNova : Seriously, if you are talking about a considerable amount of money, you should find someone you trust, like an accountant, who knows the laws. Right now (from my basic understanding) the dad can give everyone up to 13K (his kids and grandkids), then mom can also gift 13K (kids and grandkids). That's 26K a year per person. However the one getting the money could have some tax issues with a larger sum. What about a trust or college fund? You could get life insurance (it's not taxable when you die). There are some great financial vehicles out there but they (the gov't) keep screwing with the taxes and the laws so I would recommend an accountant or financial adviser.

There are certain exceptions for direct payment of education funds and probably a few other things--so you can pay your child's college tuition without triggering the gift tax. Also, there's another special case with the college 529 plan; you can accelerate gifts for up to 5 years, but you still have to file the 709. So, for example, if you were married in 2012, you could gift $130,000 (5 years, 2 people, $13K per year) to each donee without using the exemption or triggering the gift tax. Michelle and Barack Obama did this, if you take a look at their old tax returns. Of course, you've exhausted your gifts for the next five years up front, but it's still a more efficient way to give money away.

Quote from sd444 : FL is taxed across the board on food. That isn't some "recent thing." Your son goes to college: http://slickdeals.net/forums/show...stcount=25 Are you aware that 25-50% of in-state tuition is subsided by the taxes you don't want to pay anymore? Goes to school out of state? Someone else is paying that. People who live near you temporarily or move for a new job subsidize that same tuition. Why should other people pay for your son's education?

Do you try to be wrong in everything you say or are you just naturally stupid???

I'm done here.

Quote from sd444 : FL is taxed across the board on food. That isn't some "recent thing."

False. Only on selected foods (like candy, soda etc). Bakery items aren't taxed

Quote from sd444 : Taxes pay for services.

They also pay for plenty of fat, depending on the state you live in.

would it still be illegal if the market interest on such a loan was below 13k a year? (that's a LOT of interest), such that they are only gifting the interest amount each year?