urn2bfree
Full time employment: Posting here.
- Joined
- Feb 14, 2011
- Messages
- 853
I have gotten good guidance from the folks on these boards in the past so I am fishing again for any wisdom that may be out there about the following situation:
My father (may he RIP) bought whole life insurance policies for my sons. (He was under the impression this was a great way to save for their college education). Regardless, my son is through college and we never tapped the insurance. The policy has a nice cash value and I Believe could be put to better use. It is currently owned by me- so if I cash it I Pay taxes at my tax rates on the gain. I am going to give the money to my son. (Less the taxes and in such a way over tie to avoid gift taxes--
If I give him the policy instead of the money -
A) will I have to pay gift tax on the full value of the policy that exceeds $14,000?
And
B)will the gain be taxed at my son's rate?
My father (may he RIP) bought whole life insurance policies for my sons. (He was under the impression this was a great way to save for their college education). Regardless, my son is through college and we never tapped the insurance. The policy has a nice cash value and I Believe could be put to better use. It is currently owned by me- so if I cash it I Pay taxes at my tax rates on the gain. I am going to give the money to my son. (Less the taxes and in such a way over tie to avoid gift taxes--
If I give him the policy instead of the money -
A) will I have to pay gift tax on the full value of the policy that exceeds $14,000?
And
B)will the gain be taxed at my son's rate?