I found a slightly different version : The downside of this is that Sara gained $7500, I lost $7500, the government gained $7500 and the casino lost $7500. You see, I had to fork out the $7500 to my daughter and collect the winnings myself. But about half the winnings would be paid by me on my taxes as income, and other half of $7500 would be paid as gift tax for giving the winnings to my daughter (I’d already transferred the maximum yearly tax free gift of $10,000 to each of my kids).
He had to have meant that his estate would eventually pay taxes on that gift because his estate plus excess gifts would be over the lifetime exclusion limit. There’s no way to pay at the time the gift is given , and no reason to want to as the tax laws (and finances) may change between when the gift was given and the donor’s death - in 1997, the lifetime exclusion was something like $600K . You might think that a gift you gave in 1997 would ultimately be taxable someday - but you might live to 2022 and never get to to the $12 million total for estate and gifts.
I was shocked at how little it cost to up the bodily injury coverage, property damage coverage, and uninsure/underinsured coverage to the max on our one auto, and add a large umbrella policy (we had to max the auto to get the umbrella which covers our home as well). We previously had fairly low coverage (not the mins) and adding that upped our monthly bill by $40/month. You don’t have to do anything to the collision or comprehensive.
Here are the costs for our coverage for 6 months:
Bodily injury - $500,000, $87
Property Damage - $500,000, $50
Uninsured/under prop damage - $500,000, $2
Uninsure/under vehicle coverage - $500,000, $77
PIP (we maxed this a lot of line items), $44
Umbrella - $1M, $112
That all combined is a little over $60/month (as I said, we didn’t previously have the mins so it did add about $40/month).
I grew up poor, very poor, and wouldn’t say I escaped poverty until I was 30. I had years without a car because I couldn’t afford one. I get it. If you don’t have much to lose, don’t worry about this. But if you do, then worry. I’ve seen what a major accident can do. It sucks.
Well, yeah, it’s assumed that, as a homeowner, you are inherently more responsible and a better human being than any mere renter.
Since I don’t own a home there is zero chance for me to get an “umbrella” policy.
As I already said - I do not have collision coverage. Damages to my vehicle I pay for myself. All my auto insurance money is going to liability and medical coverage.
GEICO will also sell you an umbrella policy if you have a renter’s policy that covers personal liability. I think the issue is often that renters don’t have any personal liability coverage.
Also, for many years I lived in a zip code where absolutely no one would sell us a renter’s policy. That was “fun”. Also really pissed me off the time I called to ask about a renter’s policy and the agent said “why do you live there? You’re not black!” (the city was, and still is, 85% African-American but honestly, folks of other colors do live there). So I’ll let you draw your own conclusions as to why at least some renters have problems getting insurance.
Is that legal? I don’t know - I’m not a lawyer. Just reporting that for 20 years we couldn’t get renter’s insurance due to our zip code per the few people at insurance companies will to be honest as to why they wouldn’t provide that sort of coverage.
I live in a better neighborhood now, so getting coverage isn’t as hard but I do find renting rather than owning to be a problem at times. Again, the assumption is that people who rent are inherently worse risks than people who own.
The upside is that IF you can get renter’s insurance it’s cheaper than homeowners’.
Yeah, there’s a lizard, an emu, and a bunch of so-so comedians who all want to tell you that you can bundle insurance and only pay for what you need.
I had a crappy old motorcycle years ago, and insurance was about half the value of the motorcycle. Any accident would be a write-off. When I remarked on that, the agent said “but if you hit someone with that bike no matter what it’s worth, they’re just as badly injured.”
Which is why the various insurance features are NOT bundled. Protecting the bike and protecting the rider from liability are two different features. I’ve certainly had any number of run-out cars over the years with no collision and comprehensive coverage despite carrying the highest liability amount they would sell me against those same run-out cars.
Separately …
The intent of an “umbrella” policy is to be a high limits and all-perils liability shield above and beyond your existing liability shield product(s). It isn’t intended to be, nor is it priced to be, your first and only line of defense against personal liability. It’s the catastrophe backup plan, not the primary plan.
As such, if for whatever combination of circumstances, you don’t have primary liability insurance against the main perils we all face which are being a vehicle owner/operator and/or a homeowner and/or a small business operator, then they’ll decline to sell an umbrella policy. They’ll (probably) be happy to sell you a liability policy first for the mail perils and then an umbrella to back it up.
I thought that if you in any manner solicit a donation, it’s not a “gift” (unless you’re a properly registered non-profit). I.E., panhandling is income.
In 1999, the U.S. Tax Court held that money obtained by “begging” was a gift, not “earned income.” Lucas v. Commissioner. The court reasoned that the money was transferred without “an expectation of repayment or economic benefit” but rather was transferred “with a detached and disinterested generosity and out of charity” (and therefore was a “gift”).
Lucas is odd, because it involved an inmate who reported his occupation as “beggar” and reported money obtained (by “begging”) from friends and family as “income” and tried to claim the earned income tax credit. The court concluded that there was no income and therefore no credit.