Qualified Disclaimer
Categories: Ethics/Morals
Your Cousin Helen decides to give away all her stuff. She's moving to a commune in Arkansas and wants to shed all her worldly possessions. She wants to give you her prized stuffed beaver. No, that's not a euphemism...it's an actual beaver, supposedly shot and stuffed by Theodore Roosevelt himself.
The thing is disgusting. Old, moldy, stinky, and just all-out weird. You don't want it. At first, you figure you'll take it, just to be nice, and then just throw it out on the next trash day. But the lawyer informs you that, because of the Teddy Roosevelt connection, the beaver is actually worth $100,000. You'll probably have to pay a hefty tax bill just to take possession of the stupid thing.
You don't want it. You certainly don't want to pay thousands of dollars to throw it away. You don't even want the trouble of having to get rid of it. So...you turn down the gift.
This process has an official name: qualified disclaimer. You are officially disclaiming the gift (or inherited item), i.e. telling the government and anyone else who'd care that you aren't accepting it. That way, the IRS knows that you don't owe the taxes for that gift.
