Hacker News Reader

Comment by ebiester | Hacker News Reader

Yes, but only via the gift tax and after you've reached the gift tax exemption, which is pretty big.

It's not that big. It's $14,000 per person per year.

I'm trying to think of a way to "test" this, like set up a couple of accounts and programmatically transfer money back and forth. I imagine most banks/processors have some sort of mechanism to limit transactions that would be considered suspect (such as automated back-and-forth transfers). But the lower limit's not a problem -- by repeating the transaction, you'd be contributing to the limit of $/year, even with a miniscule amount.

The bank doesnt report you. It is up to you to report yourself as receiving a gift. The entire US tax system works on self reporting and the fact that during audits if you have wilfully lied you will go to jail. So you can transfer some amount a million time and then just say you transferred it once and the IRS will probably never even look into it.

The bank will mandatorily report the transaction if it is $10k or greater (or a series of transactions constructed to fall under the $10k limit).

The first $5M is exempt.

You are thinking of the inheritance tax. If I recall the gift tax and the inheritance tax interact, but you only pay the inheritance tax once, when you are dead.

Minor quibble: Inheritance tax is paid by the beneficiaries, not the deceased.

36% of single filers in the US make less than $14000 per year.

But it's not strongly enforced.

Actually it'd be very interesting if it was. A lot of 20-somethings in New York get more than that from their families.

Enforcement could put an end to many unpaid intern jobs.

Reply on news.ycombinator.com