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If we need to raise $12,000 for our adoption and family, friends, church members help us to do this will this count as part of our income? That could significantly increase our tax bracket. How do most people do this? Do they set up a special adoption bank account and have people send funds directly to it?
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Here is a link on gift tax:
[url=http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1]Frequently Asked Questions on Gift Taxes[/url]
Basically, anyone can give you up to $13,000 a year without you having to pay tax on it. The person giving you the money has already paid tax on it. They cannot deduct it on their return. The $13,000 limit is per donor so your mom could give you $13,000 and your dad could give you $13,000 and you would owe no tax. FYI-the $13,000 limit changes from year to year.
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