Mom $5000

Dear Wally,

I recently loaned my mother $5,000 to get her out of business and personal debts. She promised to pay me back, but I don't think she ever will. Can I write it off as an investment, or gift? Are there tax implications I need to be aware of?

-Anonymous

Dear Anonymous,

Ya know, I always get in such trouble when I offer legal or tax advice (or perform surgery), as I have no formal training or experience. (Or license, for that matter) Sigh. Does it even matter anymore? Anyway, with a raised eyebrow to the mother who borrows money from a child and eases out of the payments, I offer this razor-thin ledge of hope which you may grab with the smallest part of your weakest pinky: Maybe she’s trying to teach you a valuable lesson about the crap weasels, scoundrels and grifters out there who are sure to take you for a much larger, more expensive ride if she doesn’t first toughen your hide up. Or maybe she’s actually gonna buy you that Holly Hobby light bulb oven you always wanted (and never got?) as a kid (The deluxe, original version, now a collector’s item, to say nothing of a serious fire hazard, runs about 5 large, which may be just coincidental. The new ones, by the way, don’t work for crap with their stupid compact florescent bulbs). Or maybe she’s got a Peruvian cabana-boy named Paco stashed away in your old bedroom who needs to send money to his wife and kids (and everyone else in the mountain town) for indoor plumbing, and who charges $5,000 for his, ahem, services. Maybe $5,000 is how much she feels you owe her (including interest) for changing your diapers once upon a long time ago. But, unless your mom is a legitimate 501 c 3 not for profit, like The Red Cross or PETA, there’s little chance you’ll get a legit write off for this ‘gift.’ I think parents can gift up to $10k / year to kids- not sure if it works the other way around. Talk to an accountant or someone, unlike me, who actually knows something. Clearly with business and personal debts hanging over her head like a guillotine blade, she’s ‘not for profit,’ but not, I'm guessing, in the way the IRS likes. Ya know, let’s face it: Mom’s a deadbeat and your 5 grand is gone, baby, gone. Well, on the bright side, at least you know where she lives…

Good luck. Set a better example for your own kids.

--Wally

Ps don’t break her kneecaps—new ones will run you another 5 grand..

(Got a question that needs answering? email our advice columnist-- advice@bsp.com Attn: Wally)

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