This article tells people what they should know when providing financial assistance to their adult children. When making a loan to an adult child the parent or guardian should make sure that they follow the proper IRS rules regarding rates. If it is a gift then they should familiarize themselves with the $14 thousand exemption rate and what sort of exceptions exist that might allow them to exceed the exemption amount. “Any other uses of the funds exceeding the $14,000 exemption amount requires that the donor submit a Gift Tax Return (Form 709, available at www.irs.gov) when filing her income taxes for the year in which the gifted amount exceeds the $14,000 limit.” Clients will also need to factor in the consequences of their adult children not paying back the loan. Finally, this article discusses the need for parents or guardians to strive to keep the peace in their family.
See Kevin McKinley, Giving Adult Children A Helping Hand, Wealth Management, April 11, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
