Taxpayer asks:
7 years ago when I divorced I spent alot of the money I received on my children. Now I read that maybe I could have used the money as a deduction on my taxes. One I bought a $16,000. mobile home, the other I paid off a $10,000 credit card bill. Can I go back or do these items not count? Thank you.
Taxgirl says:
As a mom, I totally get that you wanted to help out your children. And if it made you happy, then it was the right thing for you to do. But with respect to income taxes, it won’t help you.
The only real tax consequences here might be gift taxes – the mobile home for your one child exceeds the annual exclusion for the year (depending on the year in which you made the purchase, that amount was between $10,000 and $13,000). It’s likely not that big a deal here since you currently – in 2009 – have a lifetime gift tax exclusion of $1 million. So, I’m not worried (though if you’ve made a habit of buying pricey things for your children you might want to double-check with a tax pro).
But deductions? Nope. Not for these things. Tell your kids they owe you big – and I hope they were truly appreciative of your generosity.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
