About look back question

carrie630December 17, 2011

Basically from what I gather, if you are elderly in your 80s you shouldn't be sending a Xmas check to your grandchildren because those gifts will be considered "spending down?" even if it's only 500 or 1000? What about long distance money gifts when it's too hard to send toys to grand kids?

See, that confuses me

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It's perfectly reasonable for someone to give a gift. The amount of the gift is considered in an audit, but I think that what you are describing might be okay, unless she gives a $1000 each to 20 grandchildren. If she has a lot of people she gifts, $20 per person may be seen as reasonable.

    Bookmark   December 18, 2011 at 10:08AM
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if she has two - would 1000 each be okay? Just wondering - but thanks for the good answer

    Bookmark   December 18, 2011 at 10:36AM
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Who knows what the auditors would judge reasonable? Does she give $2000 away every Christmas? I'd guess that whatever she's given in the past would be regarded as her normal gift.

    Bookmark   December 18, 2011 at 11:02AM
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okay - I get it now... thanks

    Bookmark   December 18, 2011 at 11:33AM
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Rules about this will vary from State to State, but generally, there is an upper amount that can be considered a "gift." Any amount above that is looked at closely.

Let's pretend a second or two. The upper limit in the State of Blank is $10,000. Therefore, a gift of 10,000 would pass. $10,000.05 would throw the whole amount into the "look back" amount. If you had given the grandchild that amount every year since birth, you MIGHT be OK, but if this was a once in a life time "gift" you MIGHT be in trouble. A big amount that was given only that one time before entry into a nursing home, would certainly be considered in the "look back" amount.

So much depends on the mood and understanding of the agent/clerk handling the case. Bad night and a hangover, bad for you too.

    Bookmark   December 18, 2011 at 1:49PM
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Ah ha! So now even though a grandmother can give a grandchild a gift of 13,000 (which is tax free at that amount) it looks "suspicious" because it could be looking like a "spend down" rather than a gift?

Yes, it sure is a tricky situation. You want to give a gift, but then you think - this could look like something else.... Thanks for the information

    Bookmark   December 18, 2011 at 6:35PM
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The trick would be to find out what the limit to a gift would be in your area......if it were 10,000, then give only 9,500.

Also....the time limit. If it's within X number of years, try to plan ahead.

    Bookmark   December 18, 2011 at 7:39PM
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