Is it legal/wise to allow my mother to put her side business, making only a few thousand dollars a year, in my name to lower her tax bracket?

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Is it legal/wise to allow my mother to put her side business, making only a few thousand dollars a year, in my name to lower her tax bracket?

I would be filing returns on the income.

Asked on January 10, 2015 under Business Law, Oregon

Answers:

Gregory Abbott / Consumer Law Northwest

Answered 6 years ago | Contributor

If the money ends up in your mother's pocket, she owes taxes on it. Period. Trying to avoid it by putting the business in your name to avoid her tax bracket likely constitutes criminal fraud, as well as opening you up to potential legal liability for anything arising out of her business.  A very BAD idea all the way around.

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Your mother should NOT put her business in your name to avoid paying taxes as this constitutes fraud.  Since your mother has a small income from her business, the amount she currently pays in taxes should be minimal when applicable deductions and exemptions are included.


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