Chime In With Your Insight On A Hypothetical

Money is often the source of many conflicts when it doesn't have to be. Misunderstandings about money are usually the reason for families and friends going separate ways. Here is a scenario, hypothetically maybe, but has probably occurred amongst (Lewis Black makes me laugh when he says this word) some of you at some point, maybe not the exact same way.

You have some relatives that are really good decent people that have never asked you for a dime ever and have fallen on hard times through no real reason of their own doing, just bad luck. You recently heard about it and they are in need of money to survive. So, some choices present themselves.

A) Do you wait for them to come to you and beg for a loan?

B) Do you reach out and offer a no strings attached helping hand (tax deductible)?

C) Do you offer to loan them money with an interest payment?

D) Do you ignore their plight altogether?

Everyone is not independently wealthy enough to just throw money at needy relatives and I get that. You have problems of your own. Now if these were jerks that have brought it upon themselves with poor behavior choices, you may be inclined to not enable them. They are not, for the purpose of this scenario.

You have the money and can afford to help, what say you members? What do you opt for? Do you have another option not listed above? If it is me in this situation and I am the one that can help, I answer B. I do not want them to have the added stress of paying it back, it will be a tax deductible gift with no strings attached.

a reply to: searcherfortruth

If it's your family, just give what you feel you can and walk away. No strings.
The only time i wouldn't would be if it were a situation they repeatedly put themselves in.

The outcome will be they either pay you back in some form of currency or they pass along the good deed when they are able.

Why would it be tax deductible?

I give , give and give already if that answers the question.

If you have the means, I'd say offer to help, without the expectation of being paid back. But only if it is ok with you to never see it repaid.
Otherwise, loan the money (without interest) and make it clear that you want to see it returned when they are able.

IMO, "D" just isn't an option, but I do know of people who have been raised to be stronger and more self reliant, and when it comes to "helping others" it just doesn't register. It conflicts with their codes and beliefs, i.e. - if I can do it, so can you.

However for me, "D" is out. If I got it, than so do you. Call it karma or adding some good to the universe, it feels good to give and it's amazing when you don't have to ask and it's given to you.

I'm a vet, disabled, and awaiting a claim with the VA because I can't work. The claim is being appealed and that takes up to five years most of the time. So I'm struggling financially. Yet when I can I give back to family, friends, and even strangers. I'm not the only one with problems, but my problems seem less wearing when I share what little I have when I can.

a reply to: Atsbhct

Because a gift under certain circumstances can be deductible if there is a paper trail, I think? I am no tax attorney, but I am pretty sure my father has utilized this method in the past. I could be completely mistaken, any tax attorneys out here? It may depend on the state the money originates from?

a reply to: JinMI

Bank some Karma for sure.

a reply to: chelsdh

You definitely have to expect, no matter what way it is structured, that it will not be coming back, at least not anytime soon. Expectations should be tempered for sure. There is more than one way to get paid back though.

a reply to: beeeyotch

Well it answers your affinity to give, but it doesn't offer specifics to how or to who specifically, just read the OP and then pick ABC or D. Or give another option if you have one. It is nice of you to give and give and give though, can I send you my banking information?

a reply to: EternalShadow

Yes it is better to give than receive and admirable of you do so even under your own dire circumstances. Thank you for your service to our country. I do not need veterans day to appreciate what our military does for us. For the purpose of this hypothetical situation would you humor me and pick ABC or D. I am guessing from what you did write that B would be your choice?

Good luck is kind of the results of making good decisions , but not always .I guess its more of a cause and effect so if the bad luck is a matter of making bad decisions I would look at ways of taking that shovel out of their hands before throwing money at it . Sometimes money can cause more harm then good .

Its like using kind words when maybe using more harsh tones might make the point better .Political correctness is for the public and not for the locker rooms and 1 on 1's with loved ones .

It's been my experience that once I started giving, I was expected to everytime the need arose. I finally, after shelling out almost 2000 for rent, bills, food and a car repair, had to draw the line. We haven't spoken to each other in two years because I became the bad guy for cutting her off. I have found it's best to let folks work out their own plights. There could be ways you can help without actually giving financial help.

Neither a lender or a borrower be.

a reply to: searcherfortruth

Only if you're gifting a large amount of money would it be applicable for a gift tax on the side of the receiver. Donations of gifts are only eligible for tax deduction if they are made to a registered charity.

originally posted by: searcherfortruth
a reply to: EternalShadow

Yes it is better to give than receive and admirable of you do so even under your own dire circumstances. Thank you for your service to our country. I do not need veterans day to appreciate what our military does for us. For the purpose of this hypothetical situation would you humor me and pick ABC or D. I am guessing from what you did write that B would be your choice?

Thanks.

I would have to say "B", without the tax deductible attachment. That seems to belittle the gift and needlessly label those I care about as "charities". IMO.

originally posted by: EternalShadow

originally posted by: searcherfortruth
a reply to: EternalShadow

Yes it is better to give than receive and admirable of you do so even under your own dire circumstances. Thank you for your service to our country. I do not need veterans day to appreciate what our military does for us. For the purpose of this hypothetical situation would you humor me and pick ABC or D. I am guessing from what you did write that B would be your choice?

Thanks.

I would have to say "B", without the tax deductible attachment. That seems to belittle the gift and needlessly label those I care about as "charities". IMO.

God bless you. Just try to not get upset like I did that it may not be paid back. Your family is more important than than that.

a reply to: Atsbhct

I think there are some gifts that can be deductible if the money goes directly to the institution, like a school or to a bank for a mortgage payment, which could be done in the scenario I suggested above. Maybe the loan could be in that form.

a reply to: EternalShadow

It would be prudent to do so if possible without belittling the gesture in my opinion. It is not the charitable designation I was thinking of, I was merely suggesting if the deduction was possible, take it. Still no strings attached either way.

I'd find a way to just give them the money anonymously, with a note saying "Pass the favor forward, when you can", or something along those lines. This way they wouldn't feel obliged to pay me back, and I wouldn't risk becoming their cash cow. Everyone wins, and if they do pass the favor forward, even better.

a reply to: searcherfortruth

Personally? If I had the money spare, I would give it to them, and not only that, I would drive them around town to save them on travel costs, I would help them get to meetings with their accountants or their bank to try and fix up payment plans for anything they are struggling with, and general dogs body for them to take the load off, so they could continue with some of the normal things of family life. Spending time with the kids, walking the dog, reading the paper... the normal stuff.

One of the worst things about financial hardship, is that you become used to the world feeling grey, like a picture you are walking through, rather than something you are a part of. It is very hard to do the normal things, when everything around you seems to be part of some monochromatic assault on the psyche.

I would do practically anything to help slot a little normalcy into the life of someone suffering that. Of course, it must be said that I have lived in pretty parlous circumstances before, and survived it fine. But I am an uncommonly resilient person, and even I would have had a harder time than I did, if it had not have been for the people I care about, and who care about me, giving me their time and their space (all they had to offer) when they had it spare.