Posted on 12/26/2017 5:15:34 PM PST by Tolerance Sucks Rocks
As a heartwarming Christmas gesture, a newly signed minor league baseball player used part of his draft bonus to pay off his parents’ mortgage.
In a viral video shared on Twitter, Arizona Diamondbacks prospect Pavin Smith tweeted a video of his parents reacting to a letter he wrote detailing that he wants their home to be officially theirs:
(Excerpt) Read more at mrctv.org ...
Very nice thing to do by this young man.
Good Man, and had to be good Parents
What a great kid. I thought his dad was going to lose it. Imagine how stunned you would be if this happened to you.
If something like this happened to me, I would be running my head into the wall to wake myself up. :-)
Dang...
Video won’t play for me.
$5 mil to play A ball? Nice thing he did but I didn’t think anyone got that for A ball. Those guys only make about $1500 a month.
Number 7 pick in the draft. Unless he gets hurt he shouldn’t be in A ball very long.
My nephew made it as high as AAA ball in the Nationals organization. First three years were guaranteed at $125K per (had to also play winter ball). He was resigned for two more years at $150K. This was twelve years ago.
He never made it to the bigs, but did well while trying to.
Wow! It used to be pretty bad in the minors. Unlike some other sports, those guys really earned their way into the majors.
I hear if you make a big league appearance and are sent back down, you make the league minimum in the minors.
The IRS will zoom in with a nice hefty “Gift Tax” with penalties compounded daily from the time the gift was made.
The young man was wise to show his generosity now rather than wait. He will be blessed because he has blessed others and shown gratitude.
How the Lifetime Gift Tax Exclusion Works
Don’t confuse the lifetime gift tax exclusion with the annual gift tax exclusion. They’re two separate things, although they work in tandem and interact with the federal estate tax as well.
The annual exclusion is $14,000 as of 2016. You can give away this much money or property to any one individual per year without incurring a gift tax. If you want to give gifts to two people, they can total $28,000. You can give $42,000 to three people, and so on. This exclusion was also indexed for inflation under the ATRA, so it may go up in future years.
If you give someone $20,000 in one calendar year, you have a choice to make. You can either pay the gift tax on the additional $6,000 over the annual exclusion, or you can let your lifetime exemption of $5.45 million cover it.
The Unified Tax Credit
The federal gift tax and estate tax are tied together by something called the Unified Tax Credit. The credit is one single $5.45 million exclusion. You can use it to shelter your estate from taxation when you die, or you can use it to defray the tax burden of giving more than the annual gift tax exclusion amount to any individual per year.
No. He will have to file a gift tax return. I don't know how much the mortgage he paid off was, but unless it was at least $5m, which seems unlikely, there will be no gift tax.
That's what I was thinking. I thought they made almost nothing until (or if) they reached the major leagues.
That is the annual gift tax exclusion, the amount you can gift to a single person each year without filing a gift tax return. If in any year you gift more than that, you will have to file a gift tax return, but that return will not show any gift tax due until you have gifted more than the unified tax credit, currently about $5.5m.
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