Reduce tax on interest by saving money under children account? -

Here is the case. I m a university student who has no income and my parents have paid quite amount of tax on interest from their saving account in the past. They are considering putting some of their money under my name so they can avoid the taxation. Ok here is my question. Is it considered my income if my parents give me large amount of money? Is the earning on interest considered to be a kind of income or the government has put a fixed limit on how much interest you can earn before it is taxed? Thank you!|::::|If your parents give you money, and you gain interest, this is considered taxable in your hands as long as you are over 18 years old. If you are less than 18 years old, interest earned in the original investment would be taxable on their returns. In later years, interest earned on interest would be your income. There is no specific exemption on interest income. If the interest plus all your other income exceeds $9,600 (10,100 for 2009), you would then be subject to income tax, regardless of the source of your income.|::::|Be careful, all interest or dividends gets added to your income. Your income rate will be at a lower rate. I am sure your parents and you would set up a payment of taxes from the account. BUT, there is a limit on what they can transfer to you. If it goes beyond the upper limit, the government will see it as a gift, and you will be taxed the gift tax which is HUGE. Think carefully, and the gov. does monitor such things. The risk is all on your parents shoulders. BTW, why do they want to screw the government out of its money?|::::|Sparky is bang on. Tax avoidance is legal, tax evasion is not. There are many ways to defer taxes and/or minimize your tax payable. A decent financial planner should be able to help you. One way or another you and likely your family will pay if you try to pull a fast one. Audits are not fun.