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If grandma gave you a cash gift in 2011, and you might have to declare BK 7 in 2013, what is the legal period for cash gifts?


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Guest usctrojanalum

really depends on your trustee. i have seen some trustees let almost anything slide as long as it's not astronomically crazy, and i've seen some trustees question every single penny and nickel of your financial picture.

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Depending on what you did with (and the trustee) they CAN make you come up with the cash.  A friend of mine got a $2750 income tax return, spent it for "frivolous" items (according to the trustee) and then filed BK7.  The trustee wanted $2750 in cash to distribute to the creditors before he would grant the discharge.  Remember, the trustee gets a percentage of what they can "recover", so they do have incentive to look into such things.

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Well, the reason I ask is that certain amounts of cash gifts don't need to be reported to the tax dudes - and they aren't considered income/assets as such. Not sure what the rules are between generations though. Parent/child "gifts" and spousal gifts that are one-time in nature aren't always something that must be reported.

 

My mother paid my rent several years ago when I was laid off from a job (it was over a thousand), but I didn't have to report it as income. She didn't expect payment back and it was essentially a gift because she wired the money into my account after which I paid my rent.

 

And a few years is a long time anyway - I don't believe a trustee would expect such a gift to still be sitting around somewhere - especially if someone had been driven to bankruptcy, right?

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