1

If I understand correctly, if one transfers more than $17,000 to his girlfriend (not married) with whom he has a child then that would need to be reported on his gift tax return; And would consume his lifetime gift tax exemption.

However, what If he pays large child support to her? My understanding is that it would not need to be reported as gift, but:

  1. Do they need court order or can child support be voluntary?
  2. Are there limits how large such child support can be?
  3. Do they have to live separate?
  4. Does she have to use all of that money for child needs or can keep for herself too?
  5. Does it matter who claims child as dependent on their tax returns?
4
  • 6
    You need a lawyer. Very dangerous trusting the internet for advice on issues like this with major implications if you get it wrong.
    – JohnFx
    May 4, 2023 at 23:00
  • @JohnFx Already did. Marriage Lawyer (with whom discussed prenup) told to talk to Accountant; and Accountant told to talk to lawyer. Is there a special qualified lawyer (or accountant) one should look for? May 4, 2023 at 23:08
  • @user389238: See littleadv's answer. A lawyer specializing in family law sounds like the right place to start.
    – keshlam
    May 4, 2023 at 23:38
  • Which jurisdiction are you in? Lots of countries use $ for currency and the answer to this could vary massively depending on where you are.
    – Vicky
    May 6, 2023 at 20:28

1 Answer 1

6

Do they need court order or can child support be voluntary?

Yes, you need a court order. Voluntary child support is called "gift". From tax perspective unless there's a legal requirement to pay - you're giving a gift.

You can gift money to your child, instead of the girlfriend (since that's your intention anyway), and then your girlfriend will be obligated to spend it to the benefit of the child or keep it in a UMTA account.

The reason to talk to the lawyer is because you can create a situation where by starting giving gifts you can no longer stop. While on one hand you'll get that order that would allow you avoiding the gift tax problem, on the other hand you'll lose the control you currently have over your finances.

One alternative would be to give money to a trust to the benefit of the child, instead of giving money to your girlfriend and calling it "voluntary child support". But IANAL, you should discuss this with a local family law specialist attorney.

18
  • 1
    Is this a US-specific answer? The OP hasn't specified (yet) where they are so you should probably make that clear in case they're not in the US.
    – Vicky
    May 6, 2023 at 20:29
  • 2
    @Vicky the $17K exemption is part of the US gift tax code. Also, people who think that they live in the only country in the world tend to be from the US.
    – littleadv
    May 6, 2023 at 21:11
  • 1
    @RonJohn as opposed to money.stackexchange.co.us that it is now?
    – littleadv
    May 8, 2023 at 17:07
  • 1
    @littleadv you certainly know that .com is by default a US-based TLD, just like .edu and .org.
    – RonJohn
    May 8, 2023 at 18:29
  • 1
    @littleadv c'mon, man. You know that "by default a US-based TLD" doesn't mean "owned by the US government".
    – RonJohn
    May 8, 2023 at 20:07

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .