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paying for child's wedding

 
 
Gary Goodman
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      10-05-2003, 10:50 AM
Any cites for paying for a child's wedding *NOT* as a
taxable gift? I favor the "throwing a party at which the kid
just happens to get married" philosophy. Of course this
doesn't work if you throw a lump of money at the kid and say
"here's the money for your wedding, pay the caterer, etc. on
your own."

Has anybody had the IRS question this?

Gary

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D. Stussy
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      10-06-2003, 10:58 PM
Gary Goodman wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


Nothing to cite here - but if such were to be considered a
taxable gift, there would be a large, social revolt in this
country.

Ask Dick Adams for an alternate opinion on the idea. (Hello
moderator....) :-)

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Dick Adams
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      10-06-2003, 10:58 PM
Gary Goodman" <(E-Mail Removed)> wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


I did a search for this and all I found that was even
remotely on target was a Revenue Ruling that said the
expenditures could be used in the support test.

There is a Tax Court case stating that weddings are not
business expenses - although it has been done.

There is also a Tax Court case concerning the estate of
some gypsies - but that was decided upon the absence of
records.

So it would appear that this issue has yet to be a point
of argument. But that is not a surprise since no tax is
due until you exceed the lifetime exemption and problems
do not arise until someone does the estate tax computations.
So it would have to be a very expensive wedding and a large
estate.

Dick

P.S.: Encourage your children to engage in unmarried
cohabitation. It's the economically optimal
solution for parents.

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HW \Skip\ Weldon
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      10-06-2003, 10:58 PM
Gary Goodman" <(E-Mail Removed)> wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


This was discussed somewhere before, and as I recall, the
conclusion was that if you gave all the money to the kid, it
would be difficult to call it anything other than a gift.
But if you paid the caterers, bartenders, room charge, etc.,
direct, and lots of people came, it would be difficult to
call it a gift to any single person.

At any rate, that's how most folks I know handle it, and
there have been no problems.

-HW "Skip" Weldon
Columbia, SC

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Michael T Wing CPA
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      10-06-2003, 10:58 PM
Gary Goodman <(E-Mail Removed)> wrote:

> Has anybody had the IRS question this?


No, but a couple of clients have asked about it. I favor
having the parents cut checks for the major expenses
DIRECTLY, rather than just handing a lump sum of money to
the kids. An alternate approach, I suppose, would be to ask
the kids to submit an itemized list of expenses paid (a sort
of an "accountable plan" <g>).

MTW

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Herb Smith
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      10-06-2003, 11:18 PM
"Gary Goodman" <(E-Mail Removed)> wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


You mean does it pass the snicker test? There is NOTHING
about financing a wedding party which would be deductible,
unless there would be some business purpose for the party.
Gifts are not deductible, no matter how you structure them.

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Harlan Lunsford
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      10-06-2003, 11:37 PM
Gary Goodman wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


I can't answer the question about IRS's attitude, but for it
to be considered a taxable gift, the expenditure would have
to be over 11,000$. I can't imagine a wedding costing that
much. (or even 22,000$ assuming joint gift!)

Cheer$,
Harlan Lunsford, EA in LA

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bill brown
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      10-06-2003, 11:56 PM
"Gary Goodman" <(E-Mail Removed)> wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


I asked the same question of this group in Dec 2002 and got
a number of interesting replies, mostly along the "throwing
a party" line. A search of Subject: Re: Is Wedding a
"gift?"? should find it.

-bill
cc: copy of most replies direct to questioner.

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Joel Berry, CPA
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      10-08-2003, 08:33 PM
"Gary Goodman" <(E-Mail Removed)> wrote:

> Any cites for paying for a child's wedding *NOT* as a
> taxable gift? I favor the "throwing a party at which the kid
> just happens to get married" philosophy. Of course this
> doesn't work if you throw a lump of money at the kid and say
> "here's the money for your wedding, pay the caterer, etc. on
> your own."
>
> Has anybody had the IRS question this?


If your child is your dependent in the year in question, and
does not file a joint tax return with his or her new spouse,
the expenditures count as support, as follows:

Rev. Rul. 76-184, 1976-1 CB 44 -- IRC Sec. 152
Reference(s): Code Sec. 152; Reg 1.152-1

Full Text:
A parent made expenditures for a child's wedding apparel and
accessories, the wedding reception, and for flowers for the
wedding party, church, and reception. The child did not file
a joint return for the year in which the child was married.

Section 152(a) of the Internal Revenue Code of 1954 defines
the term "dependent" as including a child of the taxpayer,
"over half of whose support for the calendar year in which
the taxable year of the taxpayer begins, was received from
the taxpayer." The term "support" is defined in section
1.152-1(a)(2) of the Income Tax Regulations as including
food, shelter, clothing, medical and dental care, education,
and the like.

Held, the expenditures made by the parent in the instant
case for the child's wedding apparel and accessories, the
wedding reception, and for flowers for the wedding party,
church, and reception, are part of the child's support for
purposes of determining whether the child is the parent's
dependent for Federal income tax purposes.

Joel Berry, CPA

Sugar Land, Texas

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Hrblockhead14
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      10-08-2003, 08:52 PM
Wedding expenses traditionally are paid for by the parents
of the bride. This dates well back to medieval times. Thus
if the parents Pay for the wedding, it is not a gift. If
however, the Parents Give money to the bride and or groom
ant they use it to finance wdding expenses, The IRS may look
at it as a Gift.

Most likely The IRS would want to be assured that the funds
are actually used for the wedding and not an end run around
the gift tax laws.

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