$30k gift

[Ajmsbu]

Received a 30k gift and want to start growing it.  Wife and I in the US with 3 little monster looking for a house closer to work in next two years.  What is the best option to grow it and still be able to withdraw in the next two years?  Should I put it in MMA, CD's, ETF's, MF?  I understand that I am subjected to market conditions with an ETF of MF and I don't know enought to invest in individual stock.  Appreciate any feedback.

[TheAnonOne]

Received a 30k gift and want to start growing it.  Wife and I in the US with 3 little monster looking for a house closer to work in next two years.  What is the best option to grow it and still be able to withdraw in the next two years?  Should I put it in MMA, CD's, ETF's, MF?  I understand that I am subjected to market conditions with an ETF of MF and I don't know enought to invest in individual stock.  Appreciate any feedback.

Given these two things...
- Your post count
- Your question

I have to conclude that you didn't read most of the MMM blog or much of the forum.

Stocks would be a terrible option given the 2 year time-frame. Most will say that a DECADE or longer is required for stocks. For only 2 years, you might as well keep it in a savings account. You can find some online that offer 1% rates.

CD rates are around 1.5% for what you are proposing... (2 years + $30k) but might be more work than it's worth for 2 years @ + .5% (about $300 more..)

[trailrated]

Just a side note I believe the maximum gift-able amount per year is ~$14,000 so be careful for tax implications on that come the end of the year.

[Dicey]

I have to conclude that you didn't read most of the MMM blog or much of the forum.

+1 to this. (Emphasis mine.)

As they say in courtroom dramas, "Asked and answered, Your Honor."

The answers are here. If you'll just put a little more effort into it, you'll find the rewards richly satisfying. Plus, you might learn a lot of other useful stuff along the way.

[Shor]

Just a side note I believe the maximum gift-able amount per year is ~$14,000 so be careful for tax implications on that come the end of the year.

Exceeding the annual gift tax $14k to a single recipient then detracts from the lifetime estate tax exemption: $5.45 mil. (as of 2016)
Transfers in excess of $1 mil might be subject to a generation skipping transfer tax.

[ulrichw]

Just a side note I believe the maximum gift-able amount per year is ~$14,000 so be careful for tax implications on that come the end of the year.

Side note to the side note: US tax law assigns the tax liability of the gift to the donor, not the recipient, so OP is probably in the clear on tax issues. If whoever gave the gift is subject to US taxes, they may have to deal with this per Shor's post.

See first question in following link: https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes

[trailrated]

Thanks you for the additional info shor and ulrichw, I am always learning something new from the forums.

[Full_Beard]

And to clarify the gift tax issue, since there's always been and always will be a lot of unclear statements about that, as of 2016:

1. There is no real tax consequence for the one-time gift of $30K, unless the donor has already exceeded his/her liftetime gift exemption of $5.45 million. And then the tax falls on the donor.

2. The gift-giver has to declare that he/she made a gift of $16K to you when he/she files his tax returns because one may give $14K without reporting. The other $16K must be reported and it will count to that person's lifetime exception of $5.45M. This means that one can give $14K away every year without ever reporting it and, further, those amounts do not count toward the lifetime exemption of $5.45M.

3. If the gift-giver gives more than $5.45M in his/her lifetime, then he/she will have to pay taxes on any gifts that exceed $14K in any given year (or upon death).

4. If in life and death, there's no way you'll give more than $5.45M, you pretty much do not need to worry about tax "consequences" in making a gift of $30K, 60K, or even $1M (but you need to report those gifts). If you have an estate valued above $5.45M, than the annual $14K exception is one tool to transfer wealth without paying taxes on it.