
Originally Posted by
Pan Dah
Well yeah, I suppose you could claim the whole 20K+ as a loan if you wanted. But why? Between annual exemption, lifetime additional exemption, and five-year forward averaging she doesn't owe any taxes anyway. If there are any other beneficiaries of her grandmother's estate when she dies, and there is "documentation" of a loan, the executor/trix would have to ask for repayment at that time. This could get embarrassing and messy.
Why complicate a fairly simple transaction by trying to be devious when it's not necessary?
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