The tax consequences of supporting boomerang children

Parents often believe that once their children have graduated from college, their heavy financial responsibilities will ease. But, don’t count on it! The new generation of college graduates has been dubbed the “boomerang generation,” meaning they return back home after leaving the nest or still require financial support.  Others struggle to support themselves with entry-level positions and still turn to the bank of mom and dad for assistance.

In a recent article for US News & World Report, Mike Piershale weighed in on the tax implications for parents whose adult children move back home. While parents might see large sums of financial support in the form of paying for rent a responsibility to their children, the IRS might see it as a gift. Mike offered that, "The IRS doesn't worry about the kid moving back to their old room and eating meals at their home…But if you had a parent that was giving really serious money to their kids for whatever reason, they're going to be interested in that."

The following link will take you to the full article written by contributor Susan Johnston – “The Tax Implications of Supporting Adult Children.”