Q: Our son is just about done with graduate school — two years. We loaned him $40,000 (he paid part of the cost). We have a typed note he signed to pay us back over time, with interest. If we forgive the loan, is it taxable income to him?—

H.L., Torrance

A: The wisest course for you is to consult with a certified public accountant or other qualified tax specialist.  What I can tell you is that in 2012, each parent could gift $13,000 to a child. In 2013, the monetary amount of a tax exempt monetary gift that each parent could provide to a child is $14,000 each. So, for 2013 this means a total of $28,000, without triggering a gift tax.  In my view, as long as per year your respective gifts are below the taxable threshold, you do not have to file a gift tax return, and your son does not have to declare the gifts as income. Over the course of two years you have given $40,000 to your son. Well, if it’s $20,000 per year, $10,000 from each of you per year, it seems to me that could qualify as being under the threshold for a gift to be taxable. Again, however, err on the side of caution: Consult with a tax specialist.

Q: We gave a cash gift to our niece of $10,000, and wonder if it’s deductible on our taxes.

— H.R., Hawthorne

A: Research indicates that except with regard to qualified charitable contributions — whether monetary or property of some kind — making a gift typically does not qualify as deductible.

Q: I was very relieved to literally cut in half the amount owed on a credit card (from about $10,000 to $5,000). It was a “work out,” but I just got a form in the mail that means now I have to pay taxes on the part written off?

— B.W., Wilmington

A: You don’t indicate, but I suspect it is a 1099-C “cancellation of debt” notice. If the debt forgiven on your credit card is at least $600, the credit card company (or whoever was acting for it) is required by law to file the 1099-C form with the IRS, and to send that to you as well. In turn, you are to report the amount of forgiven debt as income on your federal return.S tax help

IRS TAX HELP

The IRS has helpful publications on a wide array of topics available at its website (www.irs.gov), as well as many of the forms you may want to review as well. Items can be viewed online and/or printed out. As just one example, there is a publication concerning travel, entertainment, gifts and car expenses. At the website, click on “Forms and Publications.”

Ron Sokol is a Manhattan Beach attorney with more than 30 years of experience. His column appears on Wednesdays. Email questions and comments to him at RonSEsq@aol.com or write to him at Ask The Lawyer, Daily Breeze, 21250 Hawthorne Blvd., Suite 170, Torrance, CA 90503. This column is a summary of the law and not a substitute for legal consultation on any particular case.