Posted on 04/13/2012 1:48:15 PM PDT by Beaten Valve
President Obama and his wife, Michele, gave a total of $48,000 in tax-free gifts to their daughters, according to tax records made public on Friday.
The president and his wife separately gave each daughter a $12,000 gift under a section of the federal tax code that exempts such donations from federal taxes.
There is nothing illegal about the president’s taking advantage of this tax shelter, but it does raise eyebrows given that he has lamented the myriad tax exemptions used by the wealthy—“millionaires and billionaires” like himself—to pay less in taxes. He has yet to propose a comprehensive plan to reform the byzantine tax code.
The Obama’s tax return indicates that the gifts, likely for their daughter’s college educations, began in 2007, when the maximum exemptible amount was $24,000 per couple. The maximum exemption has since increased to $26,000 per couple.
The Obamas paid a total federal tax rate of 20.5 percent on a gross adjusted income $789,674, which would typically fall within the top federal rate of 35 percent. According to an analysis of the president’s tax return, he may have paid a lower rate than his secretary despite making more than eight times as much money as she did.
His most recent tax proposal—the so-called “Buffett Rule”—would increase taxes on about 4,000 millionaires and raise about $4.7 billion in new revenue per year, enough to cover about 0.4 percent of the projected budget deficit in 2012. Though the rule would apparently not hit the president himself.
Supporters of the rule have acknowledged that the projected revenue from the “Buffett Rule,” which the Democratic-led Senate is expected to vote down, is “not even a meaningful small amount.”
The Obama’s untaxed gift to their daughters will leave American taxpayers to subsidize the college education of the children of the multi-millionaire Obamas
This also makes no sense. Money in the kids' accounts counts for more than money the parents have when calculating any student aid. Also, the Obamas are rich enough anyway that I don't expect that they would get any federal college aid unless they get it the "Chicago way", in which case silly things the peasants have like paperwork or income statements won't matter anyway.
I think the Obamas might have purposely kept their gift under the tax threshold. Isn't that illegal...structuring or some such?
Why doesn’t he give us all the greatest tax free gift possible....his immediate resignation?
-——————————————————————————————Unfortunately it would be no better with Biden with the exception that he would screw up so badly that our misery would probably end this Nov.
I know that one can gift up to $12,000 to anyone without the recipient paying taxes.
I don’t think that such a gift exempts the giver from paying taxes on the income in the first place.
I would like clarification, please.
I don’t think that such a gift exempts the giver from paying taxes on the income in the first place.
This story makes no sense. If you give more than the limit you have to fill out form 709, but it looks like the Obamas’ gifts were below the yearly limit so no tax form at all would have to be filed.
These gifts help minimize inheritance taxes later on.
They are probably talking about UGMA (Uniform Gift to Minors) or the ability to pass money for a college education to a minor child. In each case, the parents do have to pay their normal tax rate on the money now, but the minor children do not have to pay any taxes on the money as it is a gift. AND, more importantly, it is not subject to the limit placed on how much you may pass to your heirs before the death tax kicks in.
The Obama family could keep the $48,000 in their own accounts, have it grow to something like $1.6 million, then will it to the children upon their deaths some 35 or 40 years from now. Consequently, this money would be subject to the death tax where the federal government will take at least 1/3 ($500,000) and a state government may take another significant percentage. Instead, the Obamas chose to avoid those taxes by pre-paying this money to their children now.
The kids still get the money, the Obamas pay $10,000 in taxes now, and the kids get to avoid $500,000 in taxes later.
Neat scheme, if you can afford it. And if you have Uncle Sam picking up the bill for every least little thing in your life (like housing, food, vacations, gardening, care for your mother-in-law, care for your illegal-alien aunt, etc, etc), you probably could easily afford stuff like this.
Newt could make hay of this - Romney will probably ignore or fluff it even though Obama is characterizing him as one of the eeeevul rich dudes.
I think the deduction is because they are putting the $24,000 into a college fund, not giving the money directly to the girls.
But I might be wrong.
I think you are wrong...it’s a GIFT...the parents are directing it to college funds it sounds like, but they could have given them the money to buy clothes...it doesn’t matter. And, as someone else pointed out, yes, it can help in reducing INHERITANCE TAXES....something the Obomba’s talk about having a need for, and here they are AVOIDING them! Tax AVOIDANCE is legal....Tax cheating is not.
Of course it’s a gift, specifically a 529 (c)(2)(b) Tuition Trust gift. IOW, tuition being placed in a trust as a gift.
http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._529._Qualified_tuition_programs
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