Archive for September 2019

Things You Probably Didn’t Know About Gift Tax

gift tax

Have you ever wondered what a gift tax is? Does it make sense to pay taxes on gifts?

The Gift tax was introduced by the Congress government in the year 1932 to rapidly generate revenue in the period of the Great Depression. To make it appealing to the wealthy people, they kept the Gift tax rate 25 percent less than the estate taxes. at that time.

gift tax

The plan worked out well for the Congress as they were able to prevent property owners from transferring their wealth to someone else(most probably their children or relatives) to avoid paying the estate tax. The tax exemption at that time was $50,000 but now, in 2019 it has reduced to $15,000 per recipient.

Here are a few interesting things you would want to know about the Gift tax in the United States.

1. Not all gifts are taxable

To your relief, not all gifts you give or receive are going to tax. Any gift under $15,000 is tax exempted. You can present any number of gifts. The only condition is, the gross total of your gifts worth should be less than $15,000.

Secondly, you can also donate a certain amount to the political organization, social welfare organization, or charitable organization without worrying about Gift tax. The IRS does not levy Gift tax on money, items, or property donated to help the needy.

2. The gift tax does not apply to a non-resident alien

When it comes to a non-resident or someone on a work visa, the Gift tax rules begin to appear a bit complicated. The screening process is also is far more stringent compared to the one with Income Tax. A non-resident person has to pay the Income Tax no matter what, but he/she may or may not have to pay tax on the gifts he/she sends or receives. A lot depends on whether the real estate property received as a gift is in the US or not. Also, there is no gift tax on shares in US corporations.

3. Gift tax can be avoided with Split payments

Split payment is a method of payment with which you can split a large sum into multiple small payments. It can be done to make life easy as paying a large sum is not everyone’s cup of tea, or, done to avoid Gift taxes. As already stated above, you won’t be charged a tax on gifts below a total of $15,000 annually. So, to present a gift above $15,000, you can pay $14,999 right now and the rest in the next year.


For a wealthy person, there are a ton of ways to avoid paying Gift tax. However, the methods they use to get away from paying this kind of a tax are so complex and sophisticated that most journalist news reporters find it difficult to grasp and as a result, don’t present them in front of common people. Some rich people also hire a progeny(a child or an offspring).

Buying a Used Car? What if it was used as an Uber/Lyft before?

used car

Are you willing to risk $4000-$8000 by buying a beat-up car that was previously used as an Uber/Lyft cab? No sane person would ever purchase such a car unless they are getting it for dirt-cheap or they are not aware of the prices.

used car

With the rise of cab companies like Uber and Lyft, car owners are renting out their cars to cab drivers who work for these companies. To work for such a company, all you need is a driving license and no previous criminal record.

Due to this, user car buyers have to perform an additional inspection to find out whether the car they are buying is worth the price or not. There is no point in buying a car that has 30,000 miles a year.

What signs should I look for before buying a used car?

1. Look at the mileage of the vehicle

No car owner is going to drive more than 30,000 miles a year unless he/she has offered his car to a cab company like Uber/Lyft. It is very common for a cab to cover more than 30,000 miles a year. It runs all day 24×7.

Secondly, the Odometer readings are also not a good measure of the distance the car has covered. Some car sellers roll back the Odometer ratings using sly tactics. Make sure you get the Odometer inspected by an experienced mechanic to find out whether it was replaced with a new one.

2. Wear and tear

This is the second clear sign that will immediately tell you whether the car you are about to buy used to be an Uber/Lyft. No car used for personal use is going to have massive wear and tear on the back seats. This will only happen when the car had hundreds of passenger(per week) traveling in it.

A clever car seller may replace the seat cover, so make sure you check the seats inside out. The door handles and the gear knob also wears a bit with constant usage of the car. Check that too!

3. Sticker residue on windshields

This might work if the seller forgets to remove the sticker residue from the windshield and doors of the car. Every Uber/Lyft cab is required to put stickers with the company logo on the different parts of the car like windshield, door, trunk, etc. It is not easy to take them off from the car and some car owners intentionally leave them on. Especially, the ones on the doors and trunk, as they can scrape off the paint as well, making the car look uglier.

Does it make sense to buy a (previously used as an Uber/Lyft) car for Uber/Lyft?

It absolutely does make sense to buy a used car for Uber/Lyft. Why would you spend thousands of dollars to buy a decent car to be used by a cab company? To make good profits, buy something like a used Honda or Toyota which you can easily get for less than $2000 on AutoTrader. The less money you invest, the more profits you will make from your Uber/Lyft business.