Posted on: 21st May, 2009 02:37 pm
My cousin wants to give me $100,000 by personal check for me to invest in the stock market. He wants an annual return of 5% on this ammount. What are the tax implications for me and for him?
Hi boknip!
Welcome to forums!
If you are borrowing the money from your cousin and planning to return the money to him, then I don't think there would be a tax implication. However, if he is gifting you the money, then he may have to pay the gift taxes. It would be better if you could consult a tax assessor and take his opinion in this issue.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
If you are borrowing the money from your cousin and planning to return the money to him, then I don't think there would be a tax implication. However, if he is gifting you the money, then he may have to pay the gift taxes. It would be better if you could consult a tax assessor and take his opinion in this issue.
Feel free to ask if you have further queries.
Sussane
If your cousin is giving you money to invest and you will be manging it, then he or she will be responsible for taxes on the gain and no one is responsible for taxes on the original $100,000. Assumign he or hse has already paid the taxes on that principal amount.
But if you charge some service fee to your cousine for managign his money, then you need to pay taxes on that service fee. Since that will be income for you.
But if you charge some service fee to your cousine for managign his money, then you need to pay taxes on that service fee. Since that will be income for you.