What kind of fund can someone set up for their parent? The only contributions would be from my earned income.

Submitted by Fattywatah t3_zxdirb in personalfinance

I know that there is a gift tax limit, but is there a way that I can invest funds from my earned income over time and then put it in a parent’s name?

I know I could just do a taxable brokerage account but then that introduces the possibility of double taxation which just seems unnecessary. Potentially triple taxation if above the gift tax limit. There has to be a better way.

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DeluxeXL t1_j1zmphe wrote

Talk to the parent. Have them open brokerage account and add you as authorized, and you can deposit money to it and help manage the investments. The deposits are gifts, but everything else is done in their name.

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BlazinAzn38 t1_j1znhyc wrote

As far as I'm aware there's no tax advantaged way to gift family members money that's not for education expenses.

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Mountebank t1_j1zqzh5 wrote

Replying to BlazinAzn38 (#1,119,101)

The closest thing would be for OP to claim their parent as a dependent, but that would require the parent to have below a certain level of income and for OP to pay 51% of the parent's total expenses for the year.

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PlayerTwoEntersYou t1_j1ztga8 wrote

If you want your parents to have 100% control of the money, ask them to set up a brokerage account you can send funds to.

If you want some control over it, you can set up a trust. It really depends on how much money you are talking about and what the goal is.

Edit: also, you have to file if you go over the annual maximum (x 2 if you gift each parent). Current maximum lifetime gifts before taxes is $12 million.

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