Dear Dr. Tightwad: My 10-year-old son is always borrowing money from his 8-year-old sister and forgetting to pay it back. How can I teach him that it's important to repay his debts?
Answer: First, have a frank discussion about the meaning of the words "deadbeat" and "garnishee." Then tell your son that henceforth any borrowed money is expected to be repaid within, say, one week of the date borrowed.
After that, interest will start to accrue at the rate of five cents a week (or whatever seems appropriate for the loan in question).
If at the end of a certain period - perhaps one month - the debt is still outstanding, tell him you'll begin deducting the money from his allowance and will instruct his sister not to advance him any more cash.
With luck you may never have to do any of this.
After Dr. T explained this system to a similarly delinquent son, the $2.30 in question (plus an extra 10 cents) quickly turned up on his little sister's dresser.
Dear Dr. Tightwad: I often read references to the fact that I can give each of my children up to $10,000 a year without triggering the federal gift tax. But what is the federal gift tax, anyway, and what happens if my gift exceeded $10,000?
Answer: This is one tax you'll probably never have to worry about.
It's true that if you give any one person a gift of more than $10,000 a year, you (not the recipient of the gift) are technically responsible for paying federal gift taxes (unless you're married and your spouse joins in the gift, in which case you can give each person $20,000 a year without paying the tax).