tractor
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Post by tractor on Dec 6, 2023 12:05:56 GMT -5
Starting young people off with no debt is how generational wealth happens. It actually makes way more sense to pay for these things when you are older, established and making more money. The trick is that each generation does it for the next generation. I have many Italian friends and the wedding gifts they get from their extended family are crazy by my family standards. One set of parents do the down payment on the house, the other set furnish it, grandparents buy them vehicles and pay for education, etc....it is amazing what a leg up this gives everyone. Now I want to be Italian.... my brother is currently dating a Greek woman, and her family sounds similar.
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laterbloomer
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Post by laterbloomer on Dec 6, 2023 12:19:00 GMT -5
Starting young people off with no debt is how generational wealth happens. It actually makes way more sense to pay for these things when you are older, established and making more money. The trick is that each generation does it for the next generation. I have many Italian friends and the wedding gifts they get from their extended family are crazy by my family standards. One set of parents do the down payment on the house, the other set furnish it, grandparents buy them vehicles and pay for education, etc....it is amazing what a leg up this gives everyone. Now I want to be Italian.... my brother is currently dating a Greek woman, and her family sounds similar. Now that you mention it, I used to work for a Greek family and their weddings were similar. I think what makes it work so well is everyone takes their responsibility to the next generation seriously. I just imagine saving to buy a house in my 40's instead of paying one off until my 60's. All that interest saved! I wish I had been able to do that for the GW's.
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debthaven
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Post by debthaven on Dec 6, 2023 14:07:24 GMT -5
I think it's a wonderful thing you're doing for your sons tractor . I did wonder whether help with a down payment might be better. You said your MIL's inheritance will help your boys buy a house, but I was thinking that if you help them with a down payment instead, they could each buy a home while she's still around LOL. It's also possible that they're not interested in owning a home yet!
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tractor
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Post by tractor on Dec 6, 2023 17:34:52 GMT -5
I think it's a wonderful thing you're doing for your sons tractor . I did wonder whether help with a down payment might be better. You said your MIL's inheritance will help your boys buy a house, but I was thinking that if you help them with a down payment instead, they could each buy a home while she's still around LOL. It's also possible that they're not interested in owning a home yet! There's a lot of truth to this. They both rent, but I have a feeling they're not ready to settle down in any one place yet, so home buying is a ways off. Condo, maybe, neither one is big on cutting grass or shoveling snow, although they might surprise me. I think I said this before, but the one thing they are both good at is being frugal. Neither one buys stuff just because they can so they have the capacity to stockpile cash when necessary. Now if I could only convince them to date...all I hear is "girls cost money..", which to be fair, can be true, but I think it's money well spent.
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debthaven
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Post by debthaven on Dec 6, 2023 18:44:50 GMT -5
tractor I have four kids ... a blended family, as they say. My four kids are all homeowners now. YOU CANNOT IMAGINE THE RELIEF!!! Both theirs, and ours!!! My kids are older than yours though (25-37). All the best to you and your family!
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azucena
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Post by azucena on Dec 6, 2023 22:05:40 GMT -5
Tractor - pls come back and update us with their reactions.
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phil5185
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Post by phil5185 on Dec 7, 2023 17:59:14 GMT -5
The IRS gift limit for 2024 is $18,000 per person per giver. So you can gift up to $18k for each kid - and your wife can gift $18k for each kid - ie, you can gift a total of $72k without having to submit those lengthy IRS Gift forms. (BTDT)
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jerseygirl
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Post by jerseygirl on Dec 7, 2023 18:15:21 GMT -5
The IRS gift limit for 2024 is $18,000 per person per giver. So you can gift up to $18k for each kid - and your wife can gift $18k for each kid - ie, you can gift a total of $72k without having to submit those lengthy IRS Gift forms. (BTDT) I’ve used these forms and thought fairly simple and easy to complete
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Cookies Galore
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Post by Cookies Galore on Dec 7, 2023 18:17:09 GMT -5
Well if phil is coaching you on gifting limits then I think you have officially earned YM approval to pay off their loans. Congrats!
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tractor
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Post by tractor on Dec 7, 2023 21:35:04 GMT -5
The IRS gift limit for 2024 is $18,000 per person per giver. So you can gift up to $18k for each kid - and your wife can gift $18k for each kid - ie, you can gift a total of $72k without having to submit those lengthy IRS Gift forms. (BTDT) I am a co-signer on both loans, so I don't think it would be a "gift" for tax purposes, more of an early loan payoff. Am I thinking of this wrong? Otherwise I might pay a portion in 2023, and the balance in 2024.
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haapai
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Post by haapai on Dec 8, 2023 3:06:59 GMT -5
The 2023 gift tax exclusion is $17,000. There is some language somewhere in the tax code that says that paying for the education of another person is not considered a gift but this may only apply if you are paying the educator directly. It may not apply to paying off loans taken out for the purpose of education, even if you are a cosigner.
Personally, I would do some more googling to get to the bottom of this and seriously consider splitting up gifts into separate tax years or getting your spouse involved. Yup, that kinda ruins the surprise.
Another thing to be aware of is that financial transactions done at the very end of the year sometimes do not go through. I've gotten tripped up by that in the past when I attempted to pay off a credit card (electronically) in order to start the new year with a fresh slate.
ETA: The exclusion is an annual amount not a per transaction limit. The $500 a month that you've been paying will have to be considered if you determine that such payments are considered gifts.
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Post by minnesotapaintlady on Dec 8, 2023 8:25:22 GMT -5
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tractor
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Post by tractor on Dec 8, 2023 8:27:24 GMT -5
Thank you! Interesting stuff. It will be easy to have my wife be the "giver" we have joint accounts, so it's not like I'll be doing this without her knowledge anyway.
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tractor
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Post by tractor on Dec 8, 2023 8:28:21 GMT -5
Perfect! Thanks for doing the hard work for me.
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❤ mollymouser ❤
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Post by ❤ mollymouser ❤ on Dec 10, 2023 1:53:31 GMT -5
Please put me down as another vote for payoff. The best gift my husband ever gave me was paying off my student loans as an engagement gift. (We've been married 20+ years now!)
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tractor
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Post by tractor on Dec 17, 2023 9:01:02 GMT -5
Quick Update:
My son just sent me $5k to put on his student loan. He has no idea what we're going to do next week! So not only will his loans be paid off, but he will get his $5k back. I'm so proud of him, and can't wait to see his reaction!
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Opti
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Post by Opti on Dec 17, 2023 9:44:46 GMT -5
Tell me about the cruise.
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tractor
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Post by tractor on Dec 17, 2023 10:02:53 GMT -5
Tell me about the cruise. It's 7-days in the eastern Caribbean, six stops, with Christmas in Aruba. 😊 We're going to extend it by two days to stay in San Juan and bar hop with the kids.
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Opti
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Post by Opti on Dec 17, 2023 10:02:55 GMT -5
The IRS gift limit for 2024 is $18,000 per person per giver. So you can gift up to $18k for each kid - and your wife can gift $18k for each kid - ie, you can gift a total of $72k without having to submit those lengthy IRS Gift forms. (BTDT) I am a co-signer on both loans, so I don't think it would be a "gift" for tax purposes, more of an early loan payoff. Am I thinking of this wrong? Otherwise I might pay a portion in 2023, and the balance in 2024. I forgot about the generational wealth aspect, so I apologize. I think as cosigner you are all set. I hope it all works out. And while I agree with you on dating, I think sometimes it's best to wait when you decide to settle in a certain area. If you find someone there, at least you probably both agree this is a place you want to be. If you find your person early there might be resentment based on whose career is going better or who is sacrificing what. I think as you live more life you know what's really important to you better than you did say in your 20s or even early 30s. JMO.
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Opti
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Post by Opti on Dec 17, 2023 10:04:04 GMT -5
Tell me about the cruise. It's 7-days in the eastern Caribbean, six stops, with Christmas in Aruba. 😊 We're going to extend it by two days to stay in San Juan and bar hop with the kids. Please post pics of Aruba. San Juan Puerto Rico?
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Cookies Galore
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Post by Cookies Galore on Dec 17, 2023 11:20:06 GMT -5
Tell me about the cruise. It's 7-days in the eastern Caribbean, six stops, with Christmas in Aruba. 😊 We're going to extend it by two days to stay in San Juan and bar hop with the kids. I love Aruba! Enjoy!
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Opti
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Post by Opti on Dec 17, 2023 12:04:02 GMT -5
It's 7-days in the eastern Caribbean, six stops, with Christmas in Aruba. 😊 We're going to extend it by two days to stay in San Juan and bar hop with the kids. I love Aruba! Enjoy! Its on my list of islands I want to visit.
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WannabeWealthy
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Post by WannabeWealthy on Dec 22, 2023 12:57:55 GMT -5
ugh...10%? Screw that. Pay them off for them. Christmas...DONE. Yea, 10% is ridiculous. Interest is way too high nowadays.
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tractor
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Post by tractor on Dec 26, 2023 19:54:57 GMT -5
Quick summary (who knew we'd have decent WiFi on the boat). Kids were happy and tears were shed 😊 I think the surprise was a success. Now back to the rum...
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zibazinski
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Post by zibazinski on Jan 8, 2024 19:11:34 GMT -5
Quick summary (who knew we'd have decent WiFi on the boat). Kids were happy and tears were shed 😊 I think the surprise was a success. Now back to the rum... Everyone is having a happy new year!!
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tractor
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Post by tractor on Jan 17, 2024 21:28:31 GMT -5
I made the final transfers yesterday. It's so exciting to see those 0 balances on both of their loan accounts. Simple pleasures, but they bring me great joy.
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debthaven
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Post by debthaven on Jan 18, 2024 20:43:25 GMT -5
What a wonderful thing you have done for your sons tractor !
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