So a relative who has apllied for disability and medicaid, and going through a divorce, recently got a check for $85,000 from the sale of his house (his portion between him and divorcing wife). He says he can't have more than $2,000 in the bank without being denied the benefits he's applied for and would have to reapply (which has already taken 9 months) and asked me to take a check from him to keep in an account in my name so he doesn't have problems via the gov't. Are there tax implications and what would they be if I were to take the check and keep in a savings account until everything goes through for him?

No, you have no problem. In fact, let me introduce you to my friend, Dr. Mgube, who needs you to hold a $1,000,000 check for him. You get to keep half of it, but he needs you to send him $2,000 right now!

The big problem with what you are considering is that it is fraud, and you could be penalized for abetting it. Is it worth getting a steep fine or jail to help your friend defraud the government?

That being said, if your friend is giving you the money with the expectation of receiving it back then you need to document it as a loan and he should charge an appropriate interest rate. If he is giving you the money outright there are no tax consequences for you, but he would need to file a gift tax return. There would be no tax, but it would come out of his lifetime gift exemption.

It's a foolish plan for both of you. Good luck.

It makes you an accomplice to fraud, first of all.

IRS considers this a gift. The exclusion limit is 14K per person, per year. Anything above that is taxed. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Gift-Tax.

To avoid the tax, you need six people and a method of distributing the 84K among them, so they can all cut you a check of 14K.

Any amount over a certain threshold deposited into a bank gets scrutiny. 10K used to be the magic number, I think. Scrutiny as in the IRS and the FBI (of the organization that may care) will be aware of it.

The annual exclusion for 2013 is $14,000. Your relative is required to pay the gift tax.

You need to talk to an accountant or tax attorney, or perhaps an elder law attorney. Tax risk is one thing, participating in what could be a benefits fraud scheme is another and I would be very careful about doing that.

I am not a lawyer and I don't know if what the relative is proposing is illegal but it sounds like it is possible.

There is no gift tax due until you have exceeded your lifetime exemption, which is $5.25 million in 2013. Gifts under the annual exclusion do not count towards this limit.

some guy Wrote:
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> IRS considers this a gift.

No it does not. The IRS considers the annual exclusion a gift if it is in fact a gift, with no payback considered. The OP describes a situation where the money is expected back at some point.

If they are going to do it, they should somehow formally document a loan, with a payback schedule that is low enough.

Why not cash the check and keep it out of the banks hands altogether? Is that plausible? That way OP doesn't need to worry about tax or fraud or anything else and the relative doesn't have to worry about having a bank record of having the $85,000. Not sure if this would work or not.

It's called welfare fraud and your not only risking putting yourself in jail, your not doing a good thing, as your cheating the tax payer out of their money. If you friend has 85,000 dollars that is enough to live on cheaply for a long time. Even longer if your friend chooses to move out of Northern Virginia and to pretty much any place else in the country where the cost of living isn't so high.



Mark Q. Wrote:
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> So a relative who has apllied for disability and
> medicaid, and going through a divorce, recently
> got a check for $85,000 from the sale of his house
> (his portion between him and divorcing wife). He
> says he can't have more than $2,000 in the bank
> without being denied the benefits he's applied for
> and would have to reapply (which has already taken
> 9 months) and asked me to take a check from him to
> keep in an account in my name so he doesn't have
> problems via the gov't. Are there tax
> implications and what would they be if I were to
> take the check and keep in a savings account until
> everything goes through for him?

Katie Smith seems wound up like a tight pussied bitch who is married to some pathetic pud of a man and she has never had an orgasim. Get a dildo if you need one honey. Nothing wrong with it. Enjoy!

katiesmiths a bitch Wrote:
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> Katie Smith seems wound up like a tight pussied
> bitch who is married to some pathetic pud of a man
> and she has never had an orgasim. Get a dildo if
> you need one honey. Nothing wrong with it.
> Enjoy!

+1

In her next post, she'll call you a 'teenie weinnie'. Even if you're a woman.

PS - Hello, Skank.

Skank Says What? Wrote:
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> katiesmiths a bitch Wrote:
> --------------------------------------------------
> -----
> > Katie Smith seems wound up like a tight pussied
> > bitch who is married to some pathetic pud of a
> man
> > and she has never had an orgasim. Get a dildo
> if
> > you need one honey. Nothing wrong with it.
> > Enjoy!
>
> +1
>
> In her next post, she'll call you a 'teenie
> weinnie'. Even if you're a woman.
>
> PS - Hello, Skank.


katiesmith got dumped by a rich guy who had a big dick and a badass suv. She settled for some wimp with a small cock and a hybrid. She has been bitter ever since. katiesmith's clit is bigger than her husband's cock.

Give half of it to the DNC, and Obama will direct the IRS to stay off your back.

The IRS is government run, we all know they don't get anything done properly. They ain't ganna find out, it's just a bunch of over paid workers who could care less. Just be a good friend and take the check.

definitions Wrote:
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> some guy Wrote:
> --------------------------------------------------
> -----
>
> > IRS considers this a gift.
>
> No it does not. The IRS considers the annual
> exclusion a gift if it is in fact a gift, with no
> payback considered. The OP describes a situation
> where the money is expected back at some point.

Not quite. The IRS's position is that they will consider it a loan if the recipient has a clear legal obligation to repay the money to the donor at the time he receives the money. If the donor transfers the money to the recipient for the purpose of defrauding a third party, courts are somewhat reluctant to enforce an obligation to repay the money.

This then is where it becomes a bitch. Normally gifts are subject to gift tax, meaning a return would be required if over $14K and tax would be owed if over $5M. However proceeds of criminal or fraudulent activities are frequently considered income to the recipient for income tax purposes. As for crimes I'd throw money laundering in with welfare fraud as potential problems.

I suspect that OP would be far better off if he took his relative to a decent elder law attorney to see what could be done to legally protect the money, or to cover his ass in the event something went wrong.

Mark Q. Wrote:
-------------------------------------------------------
> So a relative who has apllied for disability and
> medicaid, and going through a divorce, recently
> got a check for $85,000 from the sale of his house
> (his portion between him and divorcing wife). He
> says he can't have more than $2,000 in the bank
> without being denied the benefits he's applied for
> and would have to reapply (which has already taken
> 9 months) and asked me to take a check from him to
> keep in an account in my name so he doesn't have
> problems via the gov't. Are there tax
> implications and what would they be if I were to
> take the check and keep in a savings account until
> everything goes through for him?


The money would be considered "income" on YOUR tax return this year. He will have to explain the disbursement to you on his return also and if it sounds "fishy", he will be denied.

if you hadnt of posted this you would have had some deniability, but now your fucked.

set up a charity and donate it there, of course you own the charity blha blah blah

or just fly down to the bahamas and stick in in a bank there.

Why doesn't the person just cash the check?

Nothing to do with IRS/gift. It's call Medicaid Fraud and it's a felony!

Was able to locate the OP's IP address and ping his exact location. Should I report this thread to the FBI, Veteran Affairs, DOJ, or the IRS so I can get 30% of the fraud your committing? Maybe I'll do all of them!!!!

LetsRock Wrote:
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> The money would be considered "income" on YOUR tax
> return this year. He will have to explain the
> disbursement to you on his return also and if it
> sounds "fishy", he will be denied.

The donor has to report the gift over $14k to an individual, but the recipient does not report a gift as income.

Informant703 Wrote:
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> Was able to locate the OP's IP address and ping
> his exact location. Should I report this thread to
> the FBI, Veteran Affairs, DOJ, or the IRS so I can
> get 30% of the fraud your committing? Maybe I'll
> do all of them!!!!


Sounds like someone is trolling!!!!

Tracking YOU down. Hopefully you didn't deposit said check.

The $85k is an asset whether it was his portion of the house or cash. Is he not allowed to have more than $2k in assets or $2k in the bank or $2k in cash? Because that ship may have already sailed (the fraud) when he owned the house before it was sold.

medicaid fraud Wrote:
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> Tracking YOU down. Hopefully you didn't deposit
> said check.


I did and am rolling around naked in the cash on my bed with it and katiesmith! :O

Nigerian SCAM. Some poor sucker will bite here on the FFXU

Not an accountant Wrote:
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> The $85k is an asset whether it was his portion of
> the house or cash. Is he not allowed to have more
> than $2k in assets or $2k in the bank or $2k in
> cash? Because that ship may have already sailed
> (the fraud) when he owned the house before it was
> sold.

Some programs don't count home equity up to a certain dollar amount in determining eligibility. The problem comes when that equity is converted to cash, either by sale or loan. As I said this is where you need to consult with an elder law attorney BEFORE doing anything.

Just pay the taxes, Obama needs it to play another twenty rounds of golf this month.