Kyron Horman, 7 years old, Portland OR #40 1/01/11 - 1/18/11

[fatcatlurker]

to me the money is an issue because where did she get it?  If not her parents, then where?

Was she doing things for a secret stash?

I think the only issue with money is did it come from Marital Assets and Bunch and Terri will need to provide that information to the judge's satisfaction as well as Kaine and Kaine's attorney's satisfaction that the money is/was not infact a Marital Asset. 

JMO.

[klaasend]

You can gift $13,000 per year to anyone so Terri's mom and dad could both gift $13,000 to Terri which would amount to $26,000.  Anything more than that and the government wants to know where the money came from.  Terri would have to pay taxes on the $350k and would likely have to disclose where the money came from.  Actually, Terri would have to pay taxes on $324k (350-26)

Terri's parents, if they took out a loan for it would only get the benefit of the deduction of interest paid on the load for itemized tax purposes.

If Terri's parents wanted to pay Terri's legal fees for her, does the tax code say she has claim it as income and pay taxes on the money? Even if it is paid to the lawyer and not through terri?

Not sure TG - my guess is yes but I could be wrong.

[klaasend]

to me the money is an issue because where did she get it?  If not her parents, then where?

Was she doing things for a secret stash?

I think the only issue with money is did it come from Marital Assets and Bunch and Terri will need to provide that information to the judge's satisfaction as well as Kaine and Kaine's attorney's satisfaction that the money is/was not infact a Marital Asset. 

JMO.

Exactly and Kaine has a right to know where the money came from.

[hellokitty]

You can gift $13,000 per year to anyone so Terri's mom and dad could both gift $13,000 to Terri which would amount to $26,000.  Anything more than that and the government wants to know where the money came from.  Terri would have to pay taxes on the $350k and would likely have to disclose where the money came from.  Actually, Terri would have to pay taxes on $324k (350-26)

Terri's parents, if they took out a loan for it would only get the benefit of the deduction of interest paid on the load for itemized tax purposes.

If Terri's parents wanted to pay Terri's legal fees for her, does the tax code say she has claim it as income and pay taxes on the money? Even if it is paid to the lawyer and not through terri?

 

Terry's parents are not the client of Houze.  The money is a gift to Terri, not to Houze.

[islandmonkey]

I hope the IRS will be looking at where TH got that kind of money.

No, her parents cannot pay her bill and bypass the IRS laws.  It is a gift as the layer is not the parent's legal obligation but rather TH's.It is illegal to try to dodge the IRS in those ways.

So your saying if Terri's parents gave her the money to pay for the attorney, she must claim that on her income taxes?  I am not sure. Is there any tax people on here who can answer what the IRS tax code says about gifts of money used for legal bills? Does the money terri's parents supposedly gave to the lawyer count as income for Terri?

Totally the opposite, the one who gives the gift can give away the max allowable under IRS regulations and then when they exceed it they are the ones taxed not the one that rec'd the gift. It's this way so those with large estates can't gift everythhing to their heirs in order to avoid the death tax. I know back when I was giftind money to my kids *longgggggg time ago* the max was 10,000 a yr and now I think it's a bit higher, but IF I had the money I could give the max amount to 1000's of ppl, it is again only when that is exceeded that the donor is taxed.

Also, I am not sure of what the IRS regs are on paying bills rather than a gift ? I know you can pay anyone's bills for them, been there done that and had help from otherss when I needed it so I don't know the answer as it could have changed since I was paying bills for others.

[islandmonkey]

I hope the IRS will be looking at where TH got that kind of money.

No, her parents cannot pay her bill and bypass the IRS laws.  It is a gift as the layer is not the parent's legal obligation but rather TH's.

It is illegal to try to dodge the IRS in those ways.

So your saying if Terri's parents gave her the money to pay for the attorney, she must claim that on her income taxes?  I am not sure. Is there any tax people on here who can answer what the IRS tax code says about gifts of money used for legal bills? Does the money terri's parents supposedly gave to the lawyer count as income for Terri?

Terri's parents could claim that any monies afforded their daughter toward legal costs was a loan.  Yes?  No?

Janet

Yes, it can be considered a loan.......all they'd have to do was download or go buy a generic loan agreement and sign it, put it whatever interest rate and payment terms and it is considered a loan.

[islandmonkey]

You can gift $13,000 per year to anyone so Terri's mom and dad could both gift $13,000 to Terri which would amount to $26,000.  Anything more than that and the government wants to know where the money came from.  Terri would have to pay taxes on the $350k and would likely have to disclose where the money came from.  Actually, Terri would have to pay taxes on $324k (350-26)

Terri's parents, if they took out a loan for it would only get the benefit of the deduction of interest paid on the load for itemized tax purposes.

I know it seems like that makes far more sense, but if it's a gift the giver pays taxes not the receiver:

Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1

[klaasend]

I hope the IRS will be looking at where TH got that kind of money.

No, her parents cannot pay her bill and bypass the IRS laws.  It is a gift as the layer is not the parent's legal obligation but rather TH's.It is illegal to try to dodge the IRS in those ways.

So your saying if Terri's parents gave her the money to pay for the attorney, she must claim that on her income taxes?  I am not sure. Is there any tax people on here who can answer what the IRS tax code says about gifts of money used for legal bills? Does the money terri's parents supposedly gave to the lawyer count as income for Terri?

Totally the opposite, the one who gives the gift can give away the max allowable under IRS regulations and then when they exceed it they are the ones taxed not the one that rec'd the gift. It's this way so those with large estates can't gift everythhing to their heirs in order to avoid the death tax. I know back when I was giftind money to my kids *longgggggg time ago* the max was 10,000 a yr and now I think it's a bit higher, but IF I had the money I could give the max amount to 1000's of ppl, it is again only when that is exceeded that the donor is taxed.

Also, I am not sure of what the IRS regs are on paying bills rather than a gift ? I know you can pay anyone's bills for them, been there done that and had help from otherss when I needed it so I don't know the answer as it could have changed since I was paying bills for others.

IM I believe you are wrong.  Say I'm Terri's parents.  I have to pay taxes on whatever my income is no matter how much money I give away UNLESS it is a charitable donation.  Terri would not be considered a charitable donation.  The person who receives the money (no matter if they are related or not) will have to pay income taxes on anything over the allowable amount which was $13k per parent the last I checked or $26k.

[bebecat]

Is it fact or rumor that TH wanted Gloria Allred, I am curious.

[klaasend]

You can gift $13,000 per year to anyone so Terri's mom and dad could both gift $13,000 to Terri which would amount to $26,000.  Anything more than that and the government wants to know where the money came from.  Terri would have to pay taxes on the $350k and would likely have to disclose where the money came from.  Actually, Terri would have to pay taxes on $324k (350-26)

Terri's parents, if they took out a loan for it would only get the benefit of the deduction of interest paid on the load for itemized tax purposes.

I know it seems like that makes far more sense, but if it's a gift the giver pays taxes not the receiver:

Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1

You are talking about something entirely different:

What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

   1.
      Gifts that are not more than the annual exclusion for the calendar year.
   2.
      Tuition or medical expenses you pay for someone (the educational and medical exclusions).
   3.
      Gifts to your spouse.
   4.
      Gifts to a political organization for its use.

In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.


However, since Terri currently has zero income, it's possible that her parents are willing to pay the taxes on the $350k

Not sure how any of this matters except that KAINE has every right to know where that money came from. 

[islandmonkey]

I hope the IRS will be looking at where TH got that kind of money.

No, her parents cannot pay her bill and bypass the IRS laws.  It is a gift as the layer is not the parent's legal obligation but rather TH's.It is illegal to try to dodge the IRS in those ways.

So your saying if Terri's parents gave her the money to pay for the attorney, she must claim that on her income taxes?  I am not sure. Is there any tax people on here who can answer what the IRS tax code says about gifts of money used for legal bills? Does the money terri's parents supposedly gave to the lawyer count as income for Terri?

Totally the opposite, the one who gives the gift can give away the max allowable under IRS regulations and then when they exceed it they are the ones taxed not the one that rec'd the gift. It's this way so those with large estates can't gift everythhing to their heirs in order to avoid the death tax. I know back when I was giftind money to my kids *longgggggg time ago* the max was 10,000 a yr and now I think it's a bit higher, but IF I had the money I could give the max amount to 1000's of ppl, it is again only when that is exceeded that the donor is taxed.

Also, I am not sure of what the IRS regs are on paying bills rather than a gift ? I know you can pay anyone's bills for them, been there done that and had help from otherss when I needed it so I don't know the answer as it could have changed since I was paying bills for others.

IM I believe you are wrong.  Say I'm Terri's parents.  I have to pay taxes on whatever my income is no matter how much money I give away UNLESS it is a charitable donation.  Terri would not be considered a charitable donation.  The person who receives the money (no matter if they are related or not) will have to pay income taxes on anything over the allowable amount which was $13k per parent the last I checked or $26k.

I know it sounds insane but I just posted the IRS regulations on gift taxes.......it is still 13,000 per yr per person, it's just like the estate tax.....when you die and if you are over the amount that can be included your estate is taxed on income you have already paid taxes on (except I know the suspended the death tax for a yr or 2, but it reverts back this yr).........and the one who rec'vs the money doesn't have to pay it, and if it's within the max neither does the donor but when it is higher than the max allowable the donor is taxed unless they make special considerations for the donee to pay. Incredibly convuluted IMO, but sadly that is the way it is. Unlce Sam gets two bites at you this way

[Tamikosmom]

Terri and Kaine have been living together since 2002.  They were married in 2007.  Barring a prenup ... in Canada a divorce would imply that all financial and material assets accumulated in that seven year period would be shared equally.  Equity built up in Kaine's home over that seven year period would also be considered common property.

Somehow ... I do not believe that Terri is going to walk away from a seven year relationship with nothing.

Janet

+++++++

Terri Moulton Horman: Kyron Horman's stepmother is a profile in contradictions
Published: Thursday, August 19, 2010, 10:30 PM
Updated: Monday, October 04, 2010, 7:38 AM

In mid-December 2002, Terri and James moved into his house in Aloha, Kaine said.

http://www.oregonlive.com/portland/index.ssf/2010/08/terri_horman.html
 

[islandmonkey]

You can gift $13,000 per year to anyone so Terri's mom and dad could both gift $13,000 to Terri which would amount to $26,000.  Anything more than that and the government wants to know where the money came from.  Terri would have to pay taxes on the $350k and would likely have to disclose where the money came from.  Actually, Terri would have to pay taxes on $324k (350-26)

Terri's parents, if they took out a loan for it would only get the benefit of the deduction of interest paid on the load for itemized tax purposes.

I know it seems like that makes far more sense, but if it's a gift the giver pays taxes not the receiver:

Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1

You are talking about something entirely different:

What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

   1.
      Gifts that are not more than the annual exclusion for the calendar year.   2.
      Tuition or medical expenses you pay for someone (the educational and medical exclusions).
   3.
      Gifts to your spouse.
   4.
      Gifts to a political organization for its use.

In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.


However, since Terri currently has zero income, it's possible that her parents are willing to pay the taxes on the $350k

Not sure how any of this matters except that KAINE has every right to know where that money came from. 

No, I was talking about he gift......and the max amount obviously was exceeded if they "gifted" the money and the donor is taxed, but any atty or accountant would tell them to draft a loan document, and the ones loaning the money draft the repayment terms.

ITA that the question is where it came from but I doubt it was from marital assets, not too many ppl have 350m laying around that they wouldn't notice missing. I know personally this can be done as I have done it myself.


Theres never any income tax to you on the receipt of a gift. All the money, regardless of the amount, comes to you income-tax free.

[fatcatlurker]

Another old article about the money;  still trying to find where the "gift" talk came from, I think it was Houze but I want a link anyway for my own satisfaction IMO.

http://www.katu.com/news/local/101511664.html


But Bunch said Kaine is the one with the “significant income” and “substantial savings” and seems to want to “interfere” with her choice.

In the end the only thing that was decided is the judge will hear arguments on the money and postponement in early October, and the contempt case will be in mid-September.

Family law attorney Laura Graser, who’s also familiar with criminal appeals, says Kaine has every right as a spouse in a divorce proceeding to legally inquire about Terri’s ability to pay that fee. Legally, they’re still married and by law, their marital assets should be frozen, precluding someone from going out and spending an excessive amount of money on anything, let alone criminal defense.

“It sounds like these folks are sort of regular middle class people that have middle class income, and if in the middle of a divorce proceeding one middle class spouse arrives in a $350,000 or $100,000 expensive , fancy car, the other spouse has the right to inquire because it’s probably a marital asset until the divorce is final,” said Graser. “I don’t mean to suggest that Mr. Houze is like a fancy car. He’s a very fine lawyer and murder investigations are very time consuming to defend. That’s a very large retainer but I don’t find it outside the realm of possible.”

__________________________________________________

Future debts against Marital Assets is what this attorney is referring to, IMO.

[islandmonkey]

FCL~Totally agree about future liabilities.........you want to rid those ASAP if possible, but I now think when the tax code changed her parents COULD give her that amount of money under the lifetime gift exemption, estates tax and gift taxes are usually related. I hope this simplifies what I was trying to explain:

Reduce estate taxes by gifting
Do you anticipate leaving a taxable estate to your heirs? If so, you can avoid federal tax bites of up to 46 percent by making tax-free gifts each year, effectively lowering the size of your taxable estate.

As with estate taxes, gift taxes are paid by the donor, not the recipient. Gift tax rates are as high as estate tax rates, but there are ways to make some gifts tax-free. Through the gift tax annual exclusion, annual gifts of up to $12,000 per recipient (property or cash) are not subject to the federal gift tax.

Therefore, you can make annual gifts of $12,000 to an unlimited number of recipients. By staying under the threshold and making gifts over a number of years, you can greatly reduce the size of your estate and thereby the related estate tax when it passes to your heirs.

Here's a simple example: A father gives $10,000 to each of his three children. Each gift is under the $12,000 threshold and, therefore, is not taxable. As long as no individual recipient receives more than $12,000, no gift tax is due.

A married couple filing jointly can split a gift, which effectively increases their annual exclusion of $12,000 to $24,000 per year per recipient. For example, a couple who gives $20,000 to each of their three children can give the entire $60,000 tax-free.




$1 million lifetime gift exemption
Every taxpayer also receives a $1 million lifetime exemption against taxable gifts. That is, if you exceed the maximum annual exclusion in a year, you may not have to pay any gift tax. Note that you can deduct only the amount exceeding the $12,000 exclusion from the $1 million lifetime exemption. As long as the total of these overages is less than $1million, you will not pay gift tax.Say you give $20,000 to a friend this year. With the lifetime exemption, the $8,000 exceeding the $12,000 annual exemption will not result in any gift tax. The only consequence is that you have reduced your lifetime exemption to $992,000 from $1 million.
Some financial advisors recommend not using your lifetime exemption, if possible. Here's why: Any reduction in your lifetime limit will reduce your federal estate tax exemption by an equal amount. Let's say that, during your lifetime, your annual gift-giving over the annual limit reduces your lifetime exemption to $300,000 from $1 million. You have used up less than your lifetime limit and do not pay any gift taxes, but the $700,000 will be taken from your $2 million estate tax exemption. Therefore, only the first $1.3 million ($2 million less $700,000) of your estate will be exempt from estate taxes. If you have an estate that is subject to estate tax, you will face a delayed tax consequence for making gifts that exceeded the annual gift tax exemption.

It's important to note that any post-gift appreciation will not be subject to estate taxes. Accordingly, it is important to consult with your financial advisor to determine the pros and cons of using your lifetime exemption.

For a gift to qualify for the annual exclusion, it must be a gift of a "present interest." That is, the benefactor generally can't postpone the recipient's use or enjoyment of the gift.

[Tamikosmom]

Another old article about the money;  still trying to find where the "gift" talk came from, I think it was Houze but I want a link anyway for my own satisfaction IMO.

http://www.katu.com/news/local/101511664.html


But Bunch said Kaine is the one with the “significant income” and “substantial savings” and seems to want to “interfere” with her choice.

In the end the only thing that was decided is the judge will hear arguments on the money and postponement in early October, and the contempt case will be in mid-September.

Family law attorney Laura Graser, who’s also familiar with criminal appeals, says Kaine has every right as a spouse in a divorce proceeding to legally inquire about Terri’s ability to pay that fee. Legally, they’re still married and by law, their marital assets should be frozen, precluding someone from going out and spending an excessive amount of money on anything, let alone criminal defense.

“It sounds like these folks are sort of regular middle class people that have middle class income, and if in the middle of a divorce proceeding one middle class spouse arrives in a $350,000 or $100,000 expensive , fancy car, the other spouse has the right to inquire because it’s probably a marital asset until the divorce is final,” said Graser. “I don’t mean to suggest that Mr. Houze is like a fancy car. He’s a very fine lawyer and murder investigations are very time consuming to defend. That’s a very large retainer but I don’t find it outside the realm of possible.”

__________________________________________________

Future debts against Marital Assets is what this attorney is referring to, IMO.

fatcatlurker ... thanks.

I do not have a link handy but ... I read that Kaine made well more than $100,000 a year.  Other than the retainer ... maybe a bulk of the legal costs will come from the divorce settlement either to pay Terri's attorney or to pay off a loan.  Somehow ... I believe that Terri is far from penniless on paper.

Janet

[Tracygirl]

I agree that Kaine has a legal right to know if Terri is paying for the lawyer out of any marital assets, in the same right, Terri has a right to know how Kaine is paying for his divorce lawyer and if it is coming out of any marital assets. I am sure he has disclosed that to her because he is asking for her response, and it sounds as though Terri's will be disclosing that as well. 

You know this is all of the divorce stuff really. I don't see how it has anything to do with anything. imo of course.

[EintheB]

I do not have a link handy but ... I read that Kaine made well more than $100,000 a year. 

Kaine Horman is an Intel engineer who made $90,000 back in 2002, according to court records.

http://wweek.com/editorial/3633/14183/

[islandmonkey]

I agree that Kaine has a legal right to know if Terri is paying for the lawyer out of any marital assets, in the same right, Terri has a right to know how Kaine is paying for his divorce lawyer and if it is coming out of any marital assets. I am sure he has disclosed that to her because he is asking for her response, and it sounds as though Terri's will be disclosing that as well. 

You know this is all of the divorce stuff really. I don't see how it has anything to do with anything. imo of course.

ITA~it's the one thing I actually know for certain, so I thought I'd post the info for anyone else as I see it is also posted on Blink's site as to how it would be classified.

Also remember in many divorce cases where you have a father that has worked for dozens of yrs and a stay home wife, a judge will many times order the husband to pay her atty fees and that is not considered a gift, just a term of the divorce.

[Gypsy DD]

I hope the IRS will be looking at where TH got that kind of money.

No, her parents cannot pay her bill and bypass the IRS laws.  It is a gift as the layer is not the parent's legal obligation but rather TH's.It is illegal to try to dodge the IRS in those ways.

So your saying if Terri's parents gave her the money to pay for the attorney, she must claim that on her income taxes?  I am not sure. Is there any tax people on here who can answer what the IRS tax code says about gifts of money used for legal bills? Does the money terri's parents supposedly gave to the lawyer count as income for Terri?

Totally the opposite, the one who gives the gift can give away the max allowable under IRS regulations and then when they exceed it they are the ones taxed not the one that rec'd the gift. It's this way so those with large estates can't gift everythhing to their heirs in order to avoid the death tax. I know back when I was giftind money to my kids *longgggggg time ago* the max was 10,000 a yr and now I think it's a bit higher, but IF I had the money I could give the max amount to 1000's of ppl, it is again only when that is exceeded that the donor is taxed.

Also, I am not sure of what the IRS regs are on paying bills rather than a gift ? I know you can pay anyone's bills for them, been there done that and had help from otherss when I needed it so I don't know the answer as it could have changed since I was paying bills for others.

IM I believe you are wrong.  Say I'm Terri's parents.  I have to pay taxes on whatever my income is no matter how much money I give away UNLESS it is a charitable donation.  Terri would not be considered a charitable donation.  The person who receives the money (no matter if they are related or not) will have to pay income taxes on anything over the allowable amount which was $13k per parent the last I checked or $26k.

You are exactly right on that Klass..I do the taxes for our family.  I know that if my mother gifts more then the allowed amount..it changes each year, to our son..he needs to pay the gift tax on it.  She also has financial advisers who tell her how much she can gift each year without anyone having to pay taxes on that amount.  Believe..$350 K does not fall into the category of free money to anyone in any situation..someone ..Terri..will need to pay taxes on that amount.  However..I am not sure the true retainer was actually $350K..more then likely Hauze started with a 10 % retainer.then as the case evolves he gets more.  Bunch, however would need his own payments.  I think that she will have to divulge her assetts, all of them, including unemployment to the IRS for 2010...that includes any gifts or offsets from her parents.