Author: SethSeth
Date: May 1, 2008 10:35
I'm just wondering what would happen in this case.
A parent wants to give as much as possible to an adult child, up to
the gift limit. On January 1st, the parent gives the child the limit
($12,000).
In March, the child has expensive dental work (say, $5,000). The
parent pays the dentist the $5,000. That doesn't count, because it's
paid directly to the service provider, right?
Then the child's dental insurance company reimburses him $4,000.
What is the tax effect? (Note that the parent might not even know
that the child has dental insurance.)
Seth
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