Kelly needs help with how to handle an expensive gift from her father.
QUESTION: Kelly and her husband are about to receive a 1957 Chevy from his father. They need to work on it to make it drivable. It’s worth more than their income (about $75,000) and she’s worried that it violates Dave’s more-than-half-your-income policy.
ANSWER: If you want to keep it as an heirloom, then the car is an investment at this point, which is rare for a car. If it’s worth more than $12,000, there is gift tax that’s applicable here. He needs to see a tax accountant to do this properly, because gift tax is around 55%.