Question About Gift Letter

[dhaling]

After reading through several posts, I have come across a couple examples of how the gift letter should be written. What I don't understand is why, in the gift letter, you need to put that " the number of Iraqi Dinar is valued as a collectors item only" or is being "gifted as a novelty item only".

Can somebody please explain?

Can I add these explanations to my already nototized gift letter or do I need to do a re-write and have a new gift letter notorized?

Thanks in advance for any explanation and help with this matter...

[sdaniels0608]

The document doesn't have to be fancy just something along the lines of:

To Whom It May Concern:

I, ________________ YOUR NAME, hereby give _______ (number of dinars you are giving) Iraqi Dinars to my parents, NAMES OF YOUR PARENTS AND ADDRESS, on this date _________ (today's date.) The current value of these dinars is ______________ (put current value of the dinars.)

Executed on _________ (today's date).

Signature of YOUR NAME: __________________________________

STATE OF YOUR STATE}

COUNTY OF __________________________________

On __________________________ before me, ________________________________________, NOTARY PUBLIC, personally appeared ____________YOUR NAME, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

[dhaling]

Thanks sdaniels0608, I appreciate the feedback.

However, I'm still unsure about the wording of "collectors item" or "novelty item".

Any information regarding the wording???

[J.C.]

It is my understanding that you can "gift" up to 1 million dollars in your lifetime, and whomever the recipient of the gift is, they are not taxed on that money. This info comes from my tax attorney, and is a very trusted source.

[dhaling]

Thanks for the reply J.C.!

[sdaniels0608]

http://hubpages.com/hub/Federal-Gift-Tax-limit

dhaling,

I hope this site helps a little bit I myself am still learning the process, I'll try and dig up some more in a little while

God bless

Shane

Go RV

[dhaling]

Thanks Shane!

[natjus843]

the person you gift to will still have to pay taxes on this money when they exchange their (gifted) dinar though. i would think...

[TJS11]

If you gift your dinar to a corporation, why would it need to say novelty item? If you get it notarized & put the amount the dinar is worth TODAY, before the RV-- seems that is sufficient?

[J.C.]

What I was told by my tax atty, is that even after the RV, if you choose to give your brother, sister, mom, dad, etc $100,000 of your money, they are not taxed on that amount. You are entitled to gift up to 1 million in an individuals lifetime.

[TJS11]

That's good news-- but back to Dhaling's question-- does the gifting letter need to say anything about it being a novelty or collector's item? That's the big question, I think-- one I share.

Thanks!

[dslayer4j]

This will do fine:

Immediate Transfer of Ownership

I, __________________________, being of sound mind and body, on the ___ day of _________ 20__, do hereby freely make an immediate gift of ________________________ (number of Iraqi Dinar, valued as a collectors item only) to the (legal corporation or new owner) named ______________________________.

Signed by former owner ______________

Corporation Name(optional)or New owner ______________________

signed by President & Secretary or director (optional) _______________________

Witness (Notary) below.

Subscribed and sworn to before me

on this ___ day of _____, 20__.

______________________________

Notary Public

My commission expires __________.

[TJS11]

Thanks- dslayer... this is exactly the format I used. My question along with dhaling-- are we all certain, as we get our gifting letters notarized, that they do not need to include anything about the dinar being a novelty or collector's item? Just making sure.

Thanks!!

[Marquess]

What I was told by my tax atty, is that even after the RV, if you choose to give your brother, sister, mom, dad, etc $100,000 of your money, they are not taxed on that amount. You are entitled to gift up to 1 million in an individuals lifetime.

$1M in a lifetime but only $13,400.00 annually.

Disclaimer: I am not a tax advisor...just something I read.

Edited November 18, 2010 by Marquess

[Floridian]

Yes, you can give a gift of a million dollars total in your lifetime, but only $13,000 to each person per year. You can't give $100,000 to a person all at once without gift tax.

[TJS11]

Thanks- dslayer... this is exactly the format I used. My question along with dhaling-- are we all certain, as we get our gifting letters notarized, that they do not need to include anything about the dinar being a novelty or collector's item? Just making sure.

Thanks!!

[BtrFuture4All]

After reading through several posts, I have come across a couple examples of how the gift letter should be written. What I don't understand is why, in the gift letter, you need to put that " the number of Iraqi Dinar is valued as a collectors item only" or is being "gifted as a novelty item only".

Can somebody please explain?

Can I add these explanations to my already nototized gift letter or do I need to do a re-write and have a new gift letter notorized?

Thanks in advance for any explanation and help with this matter...

I sure don't understand the 'novelty item' or 'collector's item' either -- unless someone is gifting the OLD Saddam Hussain dinar that I suppose one might consider a 'novelty item' as I think I read where it has no value other than for a collector of old, outdated currency.

Now for the term 'collector's item' if (and I'm sayin if), there is a time limit for the 25k 10k and 5k Iraqi dinar notes to be out of circulation then I suppose they could, after that cut-off date, be considered a 'collector's item'. However, if they still have value in the currency system then when, or at what point, might the value be that of a true collector's item? Personally I don't think that will happen. I think Iraq will make a reasonable effort to get as many of the large denominations back and destroyed as possible. However, if someone happens to hold on to a few I feel there will be some bank or currency exchange that will honor the note value or refer the seller to a collector-type buyer. But then that's only my guess.

I suppose I don't see any need to put a 'label' on the the currency transferred (or gifted). This is the first time I've seen an example worded that way. I think the only important pieces of information is the amount and value at time of purchase and gifting, name and Social Security number (or other ID used for tax purposes) of the gifter, and the name and contact information of the recipient.

I've seen some examples where the recipient is to sign as acknowlegement of receipt. I can see why some gifters would not want to handle it that way for various reasons, but the notary seal should carry some weight if there was ever a family dispute.

[fatbob]

It is my understanding that you can "gift" up to 1 million dollars in your lifetime, and whomever the recipient of the gift is, they are not taxed on that money. This info comes from my tax attorney, and is a very trusted source.

I believe it's a one time gift of $650K or $12,000 a year. Tax free

[TJS11]

Thanks for addressing the actual question, Solutions!

[J.C.]

Yes, you can give a gift of a million dollars total in your lifetime, but only $13,000 to each person per year. You can't give $100,000 to a person all at once without gift tax.

But, there are ways around that yearly figure and around the gift tax. Married couples can each gift $13,000 to an individual per year, and if that person is married, you can gift their spouse as well. Gifting towards educational expenses is also not taxable.

[BtrFuture4All]

Thanks for addressing the actual question, Solutions!

You are welcome... you did note that my response was 'my opinion'

[karate kid]

Forgive me if this is a stupid question, but I am fairly new to all this. I understand the gifting letter allows you to transfer dinar to someone else while the gift amount for what it's worth now is significantly less than what it will be after it RV's. Where the confusion comes in for me is, if you gift someone 100,000 dinar, which right now is only worth approx $140, obviously there is no gift tax. BUT once it RV's, if they cash it in for say $100,000, they will still pay tax on it just like if we would have given them the dinar to cash in after the RV took place? Just trying to understand the need for the letter if when they cash it in it exceeds the $13k gift allowance and they have to pay regular tax on it anyway?

[TJS11]

Karate Kid-- I don't know the answer to your question. I only know that gifting it to an LLC means you pay the tax on the CURRENT value (as in the day you get it notarized--) so if before the RV, I pay tax on the pre-RV rate as it goes into my business account. As I pull money from my business account, it will be taxed, but I avoid that high tax initially when I deposit it.

Also all, wanted to let you know I asked Adam his thoughts on the format Dslayer posted (as it is my actual format) and he thought it was fine-- evidently we don't need anything about novelty item or collector's item in it. I think it was a confusion Dhaling and I had-- we just wanted to be certain we had done our gifting letters correctly.

Cheers, all

TJS11