Question: Paying a federal gift tax on an egagement ring?

[lmurden]

Has anybody ever heard of paying taxes on an engagement ring? A co-worker of mine says that it is a gift and that he wonders did Donald Trump or his finance pay taxes on that $2 million ring? I said that I have never heard of paying a federal gift tax on an engagement ring.

 

[nicknomo]

I would not be suprised, there seems to be a tax on just about everything. I'm sure Mr Trump would have to pay, but I sure as hell wouldn't.

 

[lmurden]

Can you image if you got married, filed joint taxes and the IRS sends you a bill for the taxes owed on the engagement ring.

I hope I'm not giving the IRS any ideas?.

 

[fire&ice]

This is funny. I started a thead on this very issue. I erased it because I didn't want all these newly excited gals to worry their pretty little heads about it.

One thing for sure - you didn't win it. So, you are O.K. there. I would fathom a guess that no one pays a gift tax on their ring. It may not be stated; but, inferred.

Do they still have luxury tax?

One thing for sure. If the Kerry/Edwards ticket gets in, you will have to pay this tax.

F&I hoping everyone takes that tongue in cheek.

 

[lmurden]

Funny thing is that I work in the legal field and not one attorney knows the answer!

If Bush/Chaney gets in only the rich may be able to afford an engagement ring. "Hoping everyone takes that tongue in cheek".

 

[fire&ice]

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On 10/19/2004 10:15:53 AM lmurden wrote:

Funny thing is that I work in the legal field and not one attorney knows the answer!

If Bush/Chaney gets in only the rich may be able to afford an engagement ring. 'Hoping everyone takes that tongue in cheek'.

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Touche!

I would venture a guess & say don't worry about it. Think about all the gifts one would have to list!

Honestly, I think I'd be more worried about paying sales tax in your state. It's more of an honor system now. I think those days are numbered.

 

[glitterata]

I believe you're allowed to receive gifts of up to $10,000 each from separate individuals without paying tax.

But I'm no lawyer or accountant, so don't take this as advice.

 

[lmurden]

I'm not worried about paying taxes nor do I think the average person should worry about, but just wondering if Donald Trump paid taxes on the ring.

 

[denverappraiser]

LM,

How about this theory:

Gift taxes are owed for gifts beyond $10k/year from one individual to another. I believe that several courts have determined that if an engagement is broken prior to the marriage, the ring is still the property of the man, or more specifically, whoever bought it. If the ownership doesn't transfer until after the wedding then that would be the date of the gift. There is a spousal exemption in the gift tax that excludes all gifts between married couples regardless of value. This means that Mrs. Trump would owe no taxes for her ring because she received as a gift from her husband, not her boyfriend.

Given the above interpretation of the law, what about gay couples?

Neil Beaty, GG ISA
Independent Appraisals in Denver

 

[lmurden]

Exactly! That's what we came up with in our office. Thanks!

 

[lmurden]

As far as gays goes the same would probably apply to them.

 

[Hest88]

I doubt that it would apply to a gay couple, since legally they would not be considered a spouse.

However, this *is* a warning to any mistresses out there that their baubles might be taxed.

 

[denverappraiser]

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On 10/19/2004 12:05:04 PM Hest88 wrote:



However, this *is* a warning to any mistresses out there that their baubles might be taxed.

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In the case of mistresses, I think it would clearly be 'earned income'.

I agree that gay couples are probably stuck since it can't be a gift between spouses (unless they are in Massachusetts)

 

[flowergurl]

What are you talking about LMurden, you'll be taxed to death under Kerry. Less $$ for diamonds, right? go Bush.