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PaperclipPerfector  4mo ago (text post)   2218 thread views

Small-Scale Question Sunday for March 1, 2026

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

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Are your parents aware that this is a taxable event, and that they are essentially throwing a large chunk of that money at the government by not structuring it properly?

If they are aware and you are simply eliding structural details, then... carry on! But I can imagine they are not aware simply because the previous gift took place internationally and so may have been overlooked by taxing authorities. Of course, the IRS doesn't always notice these things, but often they do.

You might thus "discourage" the gift by requesting that they structure it for tax avoidance, e.g. by creating an appropriately drafted trust (use a reputable lawyer, this should cost somewhere between several hundred and a few thousand dollars depending on the details, much less than the anticipated tax bill). Of course, you then must rethink the timing of your benefits.

They are structuring it appropriately I believe. I am going to have to pay capital gains tax, and they arguing to have to pay some kind of inheritance tax, but I don't claim to understand the details on their end.

If you have the time, you could also structure it over time to fall within the IRS gift limit: This year they could each give you $19k without federal tax implications. Ask a real professional about capital gains basis changes and state implications, though.

They said that this is what they should have been doing but didn't plan ahead.

Looks like federal capital gains are 15%, and state is 4.75% if I stay under 100k total income and 5% if I stay under 150k. The smartest plan seems to be for me to wait until I need the money but otherwise cash out less than $50k a year.

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